Question
The following cases are independent: Case A Jethrow Ltd. had 1,000,000 common shares outstanding on 1 January 20X2. On 27 February 200,000 shares were issued
The following cases are independent:
Case A Jethrow Ltd. had 1,000,000 common shares outstanding on 1 January 20X2. On 27 February 200,000 shares were issued for $50 each. 300,000 shares were issued on 1 August. A 2-for-1 stock split was distributed on 30 August.
Case B On 1 January 20X7, Doomsday Corp. had 200,000 nonvoting Series A shares and 600,000 Series B voting shares outstanding. Series A shares have a $2 per share cumulative dividend paid quarterly and are convertible into two Series B shares at any time after 31 December 20X9. On 1 October 20X7, 30,000 Series A shares were converted to B shares. On 1 December 20X7, 72,000 Series B shares were retired for cash.
Required: For each case, calculate the number of weighted-average ordinary shares to use in the calculation of basic EPS. Assume a 31 December year-end
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