Question

at the beginning of the calendar year, a corporation had 100,000 common shares issued. on november 1, 6,000 additional common shares were issued. the weighted average number of common shares for the current fiscal year is:______.

Answer 1

The weighted average number of common shares for the fiscal year is calculated based on the time each number of shares is outstanding. For this corporation, combining the shares outstanding for the full year and the additional shares outstanding for two months gives us a weighted average of 101,000 shares for the year.

Step-by-step explanation:

To calculate the weighted average number of common shares for the fiscal year, we have to consider the number of shares outstanding and the period they are outstanding for. At the start of the year, the corporation had 100,000 shares, and these shares were outstanding for the entire year. On November 1, an additional 6,000 shares were issued. Since this issuance occurred with two months remaining in the year, these additional shares were outstanding for 2/12 of the year. The calculation would be as follows: 100,000 shares × 12/12 months = 1,200,000 share-months, 6,000 shares × 2/12 months = 12,000 share-months, Total share-months = 1,200,000 + 12,000 = 1,212,000 share-months. Now, we divide the total share months by the number of months in a year to get the weighted average: Weighted average = 1,212,000 share-months / 12 months = 101,000 shares. Therefore, the weighted average number of common shares for the current fiscal year is 101,000.