Choice "B" is correct. In computing the weighted-average number of shares outstanding for earnings per share (EPS) determination, a stock dividend (or a stock split) to the same class of shareholders must be retroactively recognized and treated as if it had occurred at the beginning of the year. In addition, EPS for all prior periods presented must be adjusted as though the shares had been outstanding for the entire period presented.
Choices "d", "a", and "c" are incorrect. The issuance (sale) of new shares and the repurchase of a firm's shares (treasury stock) are included in the weighted-average number of share outstanding calculation from the date of the sale or purchase of the shares.