To calculate the weighted average number of common shares, any new shares issued during the year are
A) treated as if they were outstanding the entire year.
B) ignored and added to the opening balance of next year's calculation.
C) adjusted for the fraction of the year they are outstanding.
D) subtracted from the number of common shares issued at the beginning of the year.

Question

Quizplus · Accepted Answer

When calculating the weighted average number of common shares, any new shares issued during the year are adjusted for the fraction of the year they are outstanding. This means that shares are weighted based on the portion of the year they were in existence, providing a more accurate reflection of the share count over the period.

To Calculate the Weighted Average Number of Common Shares, Any