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02 Jun 2025, 23:55
Kudos
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Bunuel why are we not considering earning for 4th quarter as 500000*1.25? as another 500000 is added to make 1000000 in total
Earnings for 9 months - \(5*7.2=36\);
Earnings for 4th quarter - \(10*1.25=12.5\);
Total earning for a year - \(36+12.5=48.5\);
The average annual earnings per share - \(\frac{48.5}{10}=4.85\).
Answer: E.
Note that # of shares increased to 10 not by 10, so total shares by the end of the year is 10 not 15.
Bunuel
psychomath
A corporation with 5,000,000 shares of publicly traded stock reported total earnings of $7.20 per share for the first 9 months of operation. If during the final quarter, the number of publicly listed shares was increased to 10,000,000, and fourth quarter earnings were reported at $1.25 per share, what are the average annual earnings per share based on the number of shares at the end of the year?
A. 1.75
B. 2.40
C. 3.15
D. 3.60
E. 4.85
OA : I basically calculated the annual earnings by multiplying 7.20 with 5*10^6 which is 36 and multiplying 10*10^6 with 1.25 which is 12.5.
Now to find the average, we have to divide the total 48.5 with the total number of shares which is 15 million here. But the solution says divide the total rate i.e. 48.5 with the total outstanding shares which is 10 Million here. Can someone explain the solution for the problem.
TIA
A. 1.75
B. 2.40
C. 3.15
D. 3.60
E. 4.85
OA : I basically calculated the annual earnings by multiplying 7.20 with 5*10^6 which is 36 and multiplying 10*10^6 with 1.25 which is 12.5.
Now to find the average, we have to divide the total 48.5 with the total number of shares which is 15 million here. But the solution says divide the total rate i.e. 48.5 with the total outstanding shares which is 10 Million here. Can someone explain the solution for the problem.
TIA
Earnings for 9 months - \(5*7.2=36\);
Earnings for 4th quarter - \(10*1.25=12.5\);
Total earning for a year - \(36+12.5=48.5\);
The average annual earnings per share - \(\frac{48.5}{10}=4.85\).
Answer: E.
Note that # of shares increased to 10 not by 10, so total shares by the end of the year is 10 not 15.
03 Jun 2025, 00:10
Kudos
Bookmarks
shubhim20
Bunuel why are we not considering earning for 4th quarter as 500000*1.25? as another 500000 is added to make 1000000 in total
Earnings for 9 months - \(5*7.2=36\);
Earnings for 4th quarter - \(10*1.25=12.5\);
Total earning for a year - \(36+12.5=48.5\);
The average annual earnings per share - \(\frac{48.5}{10}=4.85\).
Answer: E.
Note that # of shares increased to 10 not by 10, so total shares by the end of the year is 10 not 15.
Bunuel
psychomath
A corporation with 5,000,000 shares of publicly traded stock reported total earnings of $7.20 per share for the first 9 months of operation. If during the final quarter, the number of publicly listed shares was increased to 10,000,000, and fourth quarter earnings were reported at $1.25 per share, what are the average annual earnings per share based on the number of shares at the end of the year?
A. 1.75
B. 2.40
C. 3.15
D. 3.60
E. 4.85
OA : I basically calculated the annual earnings by multiplying 7.20 with 5*10^6 which is 36 and multiplying 10*10^6 with 1.25 which is 12.5.
Now to find the average, we have to divide the total 48.5 with the total number of shares which is 15 million here. But the solution says divide the total rate i.e. 48.5 with the total outstanding shares which is 10 Million here. Can someone explain the solution for the problem.
TIA
A. 1.75
B. 2.40
C. 3.15
D. 3.60
E. 4.85
OA : I basically calculated the annual earnings by multiplying 7.20 with 5*10^6 which is 36 and multiplying 10*10^6 with 1.25 which is 12.5.
Now to find the average, we have to divide the total 48.5 with the total number of shares which is 15 million here. But the solution says divide the total rate i.e. 48.5 with the total outstanding shares which is 10 Million here. Can someone explain the solution for the problem.
TIA
Earnings for 9 months - \(5*7.2=36\);
Earnings for 4th quarter - \(10*1.25=12.5\);
Total earning for a year - \(36+12.5=48.5\);
The average annual earnings per share - \(\frac{48.5}{10}=4.85\).
Answer: E.
Note that # of shares increased to 10 not by 10, so total shares by the end of the year is 10 not 15.
This has been explained several times in this thread, so here it is again:
For the first 9 months, there were 5,000,000 shares. Each share earned $7.20 during this period.
Then the number of shares became 10,000,000, and each of those earned $1.25 in the fourth quarter.
Total earnings = 5 * 7.2 + 10 * 1.25 = 48.5 million
Average annual earnings per share = 48.5/10 = 4.85
