Detailed Answer
Answer (C) is correct. The weighted average number of common shares outstanding during the year is the EPS denominator. Shares issued in a stock dividend are assumed to have been outstanding as of the beginning of the earliest accounting period presented. Thus, the 75,000 shares issued on March 1 are deemed to have been outstanding on January 1. The EPS denominator equals 235,000 shares {[150,000 × (12 months ÷ 12 months)] + [75,000 × (12 months ÷ 12 months)] + [60,000 × (2 months ÷ 12 months)]}.