Which formula defines outstanding shares at year-end?

• A. Outstanding = Beginning shares + New issues - Buybacks
• B. Outstanding = Issued shares
• C. Outstanding = Beginning shares - Buybacks
• D. Outstanding = End shares + Issues

Answer: (A)

The key idea is that the number of outstanding shares at year-end evolves from the amount that was outstanding at the beginning, plus any new shares issued during the year, minus shares that were bought back.

So the best formula is: Outstanding at year-end = Beginning shares + New issues - Buybacks. This directly accounts for how the share count changes throughout the period.

Other options don’t fit because:

• Simply using issued shares counts all shares ever issued, not the ones currently outstanding after retirements and treasury holdings are considered.

• Beginning shares minus buybacks ignores any new issues that occurred during the year.

• End shares plus issues would double-count the new issues, since end shares already reflect the effects of those issues.