Purchase Solution

Stock splits and dividends affect the weighted average shares

Not what you're looking for?

Ask Custom Question

Explain how both a stock split and a stock dividend affect the computation of the weighted average number of shares outstanding.

Purchase this Solution
Solution Summary

The solution explains how stock splits and stock dividends affect the weighted average shares outstanding, specifically through the use of an example.

Solution Preview

The weighted average shares are calculated by using the time period as weights. In case of a stock split or a stock dividend, the shares outstanding prior to the stock split or stock dividend would need to be restated.

For example, say on Jan 1, the firm had 100,000 shares outstanding. On April 1, the firm issued say ...

Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Dividends, Splits, & Reverse Splits

    o A discussion about the reasons for stock dividends, stock splits, and reverse splits. o An explanation of how stock dividends, stock splits, and reverse splits affect the firm and the investor. http://finance.yahoo.com/echarts?

  • Practice exam questions: Earnings per share, basic and diluted

    a. 226,665 b. 220,000 c. 243,333 d. 260,000 Stock dividends and stock splits are retroactive. 200,000 + 20,000 [the 10% extra shares, retroactive to start of year] x 10/12 = 183,333 Plus 260,000 x 2/12 = 43,333 13.

  • Stock Dividends, Splits and Reverse Splits

    for stock dividends, stock splits, and reverse splits; 4) An explanation of how stock dividends, stock splits, and reverse splits affect the firm and the investor.

  • Stock dividends, stock splits, and reverse splits

    of the reasons for stock dividends, stock splits, and reverse splits o An explanation of how stock dividends, stock splits, and reverse splits affect the firm and the investor Stock dividend is a payment made by a firm to its owners in the form of stock

  • Cash dividend, share repurchase, stock dividend, stock split

    In a stock split the firm increases the number of shares outstanding, say 2:1. It sends shareholders more shares. Both stock dividends and stock splits increase the number of shares outstanding, so "the pie is divided into smaller pieces."

  • Dividends and Stock Spilt Transactions and Stockholder's Equity

    If you owned some shares of Rigby, would you expect the total value of your shares to go up or down as a result of the stock dividends and stock split? 2. What intangibles might affect the stock value? Hello Please find the answers below.

  • Entries for Stock Dividends and Stock Splits

    458036 Entries for Stock Dividends and Stock Splits 1) (Entries for Stock Dividends and Stock Splits) The stockholders' equity accounts of G.K. Chesterton Company have the following balances on December 31, 2008.

  • P16-9 Agassi Corporation weighted-average number of common

    435909 P16-9 Agassi Corporation weighted-average number of common shares and EPS Agassi Corporation is preparing the comparative financial statements to be included in the annual report to stockholders.

  • Earnings per share for common stock

    EPS = (Net Income - Preferred Dividends)/Weighted average common shares The first step is to calculate the weighted average common shares. This is calculated as 150,000 shares are outstanding between Oct 1 and Feb 1 = 4 months.

View More Related Solutions