Amy currently owns 15 % of Aloft, Inc. The company has a total of 125,000 shares outstanding with a current market price of $20 a share. At present, the firm is offering an additional 12,500 shares at a price of $17.50 a share. Amy decides not to participate in this offering. What will Amy's ownership position be after the offering is completed?

Question

Quizplus · Accepted Answer

Before the offering, Amy owns 15% of 125,000 shares, which equals 18,750 shares. After the offering, the total number of shares will increase by 12,500 to 137,500. Amy's ownership will then be 18,750 / 137,500 = 0.1364 or 13.64%.

Amy Currently Owns 15 % of Aloft, Inc