Calculating weighted average number of ordinary shares outstanding

Assuming YE is 31 Dec:

Use this format –

Date Shares Months Fraction Total
1.1 400 3/12 7.4/8** 13,320
1.4 500* 9/12 – 375

Total 13,695

To calculate the EPS for the year you would then divide the profit (not given in the question you have provided) divided by 13,695.

* This is a rights issue for 1 in 4 so 400/4 = 100 Therefore the shares in issue is 400+100=500

** We need to calculate the weighted average including the new shares so therefore:

4 shares @ 8 = 32
1 share @ 5 = 5

5 shares = 37 (32+5)

1 share after rights issue = 7.4 (37/5 shares)

Fraction is therefore 7.4/8