On January 1, 2015, a company had 250,000 shares of its $2 par value common stock outstanding. On March 1, the company sold an additional 500,000 shares on the open market at $20 per share. the company issued a 20% stock dividend on May 1. On August 1, the company purchased 280,000 shares and immediately retired the stock. On November 1, 400,000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2015?

a. 477,777

b. 344,444

c. 750,000

d. 1,020,000

e. none of these answers are correct

Question

Robert Mills

Business

29 April, 08:06

On January 1, 2015, a company had 250,000 shares of its $2 par value common stock outstanding. On March 1, the company sold an additional 500,000 shares on the open market at $20 per share. the company issued a 20% stock dividend on May 1. On August 1, the company purchased 280,000 shares and immediately retired the stock. On November 1, 400,000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2015?

a. 477,777

b. 344,444

c. 750,000

d. 1,020,000

e. none of these answers are correct

+2

Answers (1)

Know the Answer?

Miriam David · Answer 1

Answer is Option C: 750,000.

Explanation:

A stock dividend is a payment that is made to the shareholders in shares and not in cash. It increases the number of common shares that are representing the shareholder's investment. When this occur, a company needs to restate the shares that were outstanding before the stock dividend.

When we calculate the weighted-average number of shares outstanding for 2015, we sum it for the whole year for all quarters.

Total for the whole year will come as 750,000.