pogo

Remember stock splits and stock dividends are retrospectively stated as an addition and reverse stock split are a subtraction.

There assumed to have been OUTSTANDING SINCE THE BEGINNING OF THE YEAR

Treasury stock or repurchased stock are subtracted in the same manner if it occurred prior to the split/dividend. If shares were repurchased after, then subtract the repurchased shares by the Fraction of the year. Fraction of the year is the time period in months, like a moving weighted average. Quick example : Between Jan and next event (3/1 - Issued) is 2 out of 12 months (January and Feb), hence, (2/12).

Restatement Factor can be 2 for a 2-for-1 stock split, 3 for 3-for-1 split, 25% stock dividend is 1.25.

In this example its 1.50 for a 50% stock dividend

Shares outstanding: Its cumulative and so keep adding/subtracting for the activity between periods. That you MUST NOT FORGET !! So 1/1: 100,000, on 3/1, issued 20,000 more, so column b must show the changes, UNADJUSTED for retrospective treatment. So, the 180,000 is the 120,000 + (.50*120,000) = 120,000 +60,000 (additional shares) = 180,000

This is the table I use to get WACSO:


1/1: Beginning Balance: 100,000
3/1: Issued 20,000 shares for cash
6/1: Issued 50% stock dividend
11/1: Issued 30,000 shares for cash

D
A B C (A*B*C)
Dates Outs: Shares Outstanding RestatementFactor : FractionoftheYear Weighted Shares

1/1-3-1 100,000 1.5 (2/12) 25,000
3/1-6/1 120,000 1.5 (3/12) 45,000
6/1-11/1 180,000 (5/12) 75,000
11/1-12/31 210,000 (2/12) 35,000
______
WACSO: 180,000
_______


If you have the same example, except on 12/31, the company announced another 2-for-1 split, then take WACSO and DOUBLE it for a total of 360,000.


Hope this helps!