Final answer:
When a company reacquires its own shares for calculating EPS, the reacquired shares that are subtracted from the weighted-average calculation are weighted for the period that they are outstanding. The correct option is A. period that they are outstanding.
Step-by-step explanation:
When a company reacquires its own shares, the weighted-average shares are calculated for the purpose of determining EPS (earnings per share). In this calculation, the reacquired shares that are subtracted from the weighted-average calculation are weighted for the period that they are outstanding.
Let's illustrate this with an example. Suppose a company repurchases 1,000 shares in the middle of the fiscal period and holds them until the end of the period.
The number of shares outstanding before the repurchase was 10,000. The weighted-average shares calculation would be (10,000 * (number of days in the period)) + (1,000 * (number of days held))/365.
So if the period is 365 days and the shares were held for 100 days, the weighted average shares would be (10,000 * 365) + (1,000 * 100)/365 = 10,273.97 shares. The correct option is A. period that they are outstanding.