Question

On January 1, 2011, Summerhill Distillers Inc. had 475,000 common shares outstanding. On April 1, the corporation issued 47,500 new common shares to raise additional capital. On July 1, the corporation declared and distributed a 20% stock dividend on its common shares. On November 1, the corporation repurchased on the market 45,000 of its own outstanding common shares to make them available for issuances relating to its key executives’ outstanding stock options.
Instructions
(a) Calculate the weighted average number of shares outstanding as at December 31, 2011.
(b) Assume that Summerhill Distillers Inc. had a 1-for-5 reverse stock split instead of a 20% stock dividend on July 1, 2011. Calculate the weighted average number of shares outstanding as at December 31, 2011.


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  • CreatedAugust 23, 2015
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