How does a full market price issue impact Basic EPS?

When addressing how a full market price issue impacts Basic Earnings Per Share (EPS), it is essential to understand the concept of share issuance timing and its influence on EPS calculation.

In a full market price issue, new shares are issued at their fair market value, often to raise capital. However, the critical factor to consider is that these shares are not necessarily outstanding for the full reporting period. Therefore, when calculating Basic EPS, the number of shares must be time apportioned, reflecting only the portion of the year during which the new shares were outstanding.

For instance, if new shares were issued halfway through the year, only half of those shares would be included in the EPS calculation for that period. This approach ensures that the total earnings available to shareholders are accurately divided by the appropriate number of shares in order to calculate an accurate Basic EPS figure.

As a result, the correct answer highlights the necessity of adjusting the number of shares for time when calculating Basic EPS in the context of a full market price issue.