CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

On December 31, 2014, Whale Inc. had 600,000 shares of common shares issued and outstanding. Whale issued a 10% stock dividend on July 1, 2015, and on October 1, 2015, purchased and retired 48,000 of its common shares. The number of shares Whale should use in computing basic earnings per share for the year ending December 31, 2015, is ______.
A. 612,000
B. 618,000
C. 648,000
Explanation: (600,000 x 1.10) - (48,000 x 3/12) = 648,000

User Contributed Comments 10

User Comment
leoo shouldn't it be 2/12 instead of 3/12, october to december
johnsk From Oct. 1 to Dec. 31: 3 months.
turtle 610 - 12 = 598
what were they smoking while preparing these questions :-)?
enderek re turtle

what you were smoking while adding this comment?;-)
600x1.1=660 not 610
ganguelova (600,000*1.1)*9/12 + (600,000*1.1-48,000)*3/12 = 648,000
cong Note that stock dividends do not affect 48000 here
potocah 10% dividend was issued in july. Why isn't it 60*(6/12)? help!
ezedchicago Since stock dividend occurred mid-year, why isn't the WAVG = 600*.5 + 660*.25 + 612*.25 = 618? Doesn't the calc above assume the stock div occurred as of begin-year?
Joel1980 Stock dividends and splits are assumed to have occured at the start of the year.
DavidAkira Note: Stock dividends and splits are assumed to have occured at the start of the year
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