5 MILLION.EXPLANATIONTHE WEIGHTED AVERAGE NUMBER OF COMMON SHARES OU...

2. - UNDERSTANDING INCOME STATEMENTS 1 2. - UNDERSTANDING INCOME STATEMENTS 1
UNDERSTANDING INCOME STATEMENTS 1
2.5 million.ExplanationThe weighted average number of common shares outstanding is the number of shares outstanding during the year weighted bythe portion of the year they were outstanding. For the QRK Company, the weighted number of shares outstanding is the originalone million shares plus 150,000 shares for the end-of-March issue (= 200,000 × 9/12), plus 250,000 shares for the end-of-Juneissue (= 500,000 × 6/12), plus 200,000 shares for the end-of-September issue (= 800,000 × 3/12), or 1.6 million shares.

Question #64 of 90

Question ID: 414169

Assume that the exercise price of an option is $5, and the average market price of the stock is $8. Assuming 816 options are outstandingduring the entire year, what is the number of shares to be added to the denominator of the diluted EPS?غ A)