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pfeffer company reports net income of $360 million for 20x1; the company's tax rate is 40%. at the beginning of the year, 200,000 common shares were outstanding. on august 1, the company issued an additional 120,000 shares. weighted-average shares will be multiple choice question. 240,000. 250,000. 320,000.

Answer :

There will be 250,000 weighted average shares.

Motive: [200,000 + (120,000 x 5/12)]

What takes place when a company issues more stock?

When companies issue more shares, there is an increase in the amount of common stock that is traded on the stock market. If too many shares are issued, the holdings of current investors may be diluted. Share dilution occurs when the additional shares reduce the value of the existing shares to investors.

Why do businesses issue more shares?

It is conceivable that a firm will elect to issue more stock in order to raise more money. It goes without saying that obtaining more money will assist the company because it will enable it to expand.

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