To Calculate the Weighted Average Number of Common Shares, Any

question 12

Multiple Choice

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.

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Definitions:

Expected Value

The weighted average of all possible values of a random variable, with the weights being the probabilities of each outcome.

Absolute Value

The distance of a number from zero on the number line, disregarding its sign.

Payoff

The outcome or return from an investment or decision, often expressed in terms of profit or loss.

Probability

Probability quantifies the likelihood of an event occurring, ranging from 0 (impossible) to 1 (certain), and is a fundamental concept in statistics.