If the number of common shares outstanding changes during the period, the weighted average number of shares is used to calculate earnings per share. The weighting is based on how long 20,000 shares outstanding and issued an additional 5,400 shares on August 20, the weighted average shares would be calculated as: Alternatively, the weighted average shares may be calculated using the total common shares outstanding at a given time. Diluted earnings per share Diluted earnings per share uses the same formula. However, it requires that additional common
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