In Calculating the Weighted Average of Common Shares Outstanding, When

question 27

Multiple Choice

In calculating the weighted average of common shares outstanding, when a stock dividend or stock split occurs, the additional shares are

• A) ignored.
• B) weighted by the number of months outstanding.
• C) considered outstanding at the beginning of the year.
• D) considered outstanding at the beginning of the earliest year reported.

---

Definitions:

Market Return

The total return from an investment or portfolio, including dividends and capital gains, as compared to the overall market.

Constant Growth Stock

A stock whose dividends are expected to grow at a constant rate indefinitely.

Stock Value

The financial worth of a company's shares, determined by market conditions, company performance, and investor demand.

Preferred Stock

A type of stock that gives its holders preference over common stockholders in terms of dividend payments and asset distribution upon liquidation.