solution

solution.

During 2020, Chittagong Corporation reported a net loss of BDT115,600. On 1 January 2020 they had 200,000
shares of common stock outstanding. On 1 May 2020, they issued 50,000 new shares. On 1 December 2020, 75,000
shares were purchased back as treasury stock.
Chittagong Corporation also had 1,000 shares of 10%, BDT100 par, preferred stock outstanding.
During 2018, Chittagong Corporation issued 600, BDT1,000 par, 7% bonds for BDT 600,000 (issued at par). Each of
these bonds is convertible to 100 shares of common stock. The tax rate is 40%.
According to the company’s policy no dividend is announced if the net profit is below BDT 100,000.
1.1 Calculate their weighted average number of common shares. Show all steps of calculation in the box to
get scores for this question.

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