# Question on earning per share

For 2009, Flamingo Products had net income \$1,000,000. At 1 January 2009 there were 1,000,000 outstanding. On 1 July 2009,the company issued 100,000 new shares for \$ 20 per share. The company paid \$200,000 in dividend to common stockholders. What is Flamingo's basic EPS for 2009? Basic EPS $$=\frac{Net \ Income}{No. \ of \ outstanding \ shares} = \frac{1000000}{1000000}=1$$ But the answer is 0.95 with outstanding No. of shares of 1050000. I can't suss out where this additional 50000 in outstanding shares come from. • At 1-1-2009there were 10,00,000 outstanding shares and on 31-12-2009(end of the financial year), there were 11,00,000 outstanding shares. So on an average there were 10.50,000 outstanding shares$(10,00,000+11,00,000)/2=10,50,000$So basic EPS=$\frac{10,00,000}{10,50,000}=0.95238\$ May 1 '19 at 12:58