When stock dividends or stock splits occur, computation of the weighted-average number of shares requires restatement of the shares outstanding before the stock dividend or split.

Question

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When stock dividends or stock splits occur, the computation of the weighted-average number of shares outstanding requires that all shares, including those issued before the dividend or split, be restated to reflect the change on a basis that is consistent throughout the entire period, to ensure comparability and accuracy in earnings per share calculations.

When Stock Dividends or Stock Splits Occur, Computation of the Weighted-Average