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I don’t think that answers my question. I’m not trying to apply the fraction to the bonus shares. I think I should apply the fraction to the original 10m shares plus the 2m shares issued at full market value so a 1 for 4 bonus issue gives 3m extra shares. The answer in the book uses the weighted avg of the 10m original shares and the 2m shares issues later in the year, which is 11.5m. I don’t understand why they are applying the bonus fraction to the weighted average. On the day of bonus issue there were 12m shares so I think you should use that number
I don’t think that answers my question. I’m not trying to apply the fraction to the bonus shares. I think I should apply the fraction to the original 10m shares plus the 2m shares issued at full market value so a 1 for 4 bonus issue gives 3m extra shares. The answer in the book uses the weighted avg of the 10m original shares and the 2m shares issues later in the year, which is 11.5m. I don’t understand why they are applying the bonus fraction to the weighted average. On the day of bonus issue there were 12m shares so I think you should use that number