At the start of the year, Ajax Corporation had 300,000 shares outstanding. On May 1, 30,000 shares were issued. On September 1, another 50,000 shares were issued. Calculate the weighted average shares outstanding.
A) 336,667
B) 340,000
C) 346,667
D) 350,000
E) 367,667

Question

Quizplus · Accepted Answer

The weighted average shares outstanding are calculated by taking into account the number of shares outstanding and the portion of the year they were outstanding. From January 1 to April 30 (4 months), there were 300,000 shares. From May 1 to August 31 (4 months), after issuing 30,000 shares, there were 330,000 shares. From September 1 to December 31 (4 months), after issuing another 50,000 shares, there were 380,000 shares. The calculation is as follows: (300,000 shares * 4/12) + (330,000 shares * 4/12) + (380,000 shares * 4/12) = 100,000 + 110,000 + 126,667 = 336,667 shares.

At the Start of the Year, Ajax Corporation Had 300,000