Kelly currently owns 20 % of Peters, Inc. The company has a total of 175,000 shares outstanding with a current market price of $25 a share. At present, the firm is offering an additional 15,000 shares at a price of $22.50 a share. Kelly decides not to participate in this offering. What will Kelly's ownership position be after the offering is completed?

Question

Quizplus · Accepted Answer

After the offering, the total shares will be 190,000 (175,000 + 15,000). Kelly's shares remain at 35,000 (20% of 175,000). Her new ownership percentage is 35,000 / 190,000 = 18.42%.

Kelly Currently Owns 20 % of Peters, Inc