Question 1

ABX company has net income of $1 million. It paid dividends of $100,000 to its preferred shareholders and also paid dividends of $200,000 to its common shareholders.

The company had 12,000 shares of common stock outstanding on January 1.On March 1, it issued 2700 shares; on July 1, it declared a 20% stock dividend; and on December 1, it acquired 480 shares as treasury stock.

(i) Calculate the weighted average number of common shares.

(ii) Calculate the basic Earning per Share (EPS).