Adak currently owns 10 % of Earthworks, Inc. The company has a total of 140,000 shares outstanding with a current market price of $19 a share. At present, the firm is offering an additional 10,000 shares at a price of $18 a share. Adak decides not to participate in this offering. What will be his ownership position after the offering is completed?

Question

Quizplus · Accepted Answer

Adak currently owns 10% of 140,000 shares, which is 14,000 shares. After the offering, the total shares will be 150,000 (140,000 + 10,000). Adak's ownership percentage will be 14,000/150,000 = 9.33%.

Adak Currently Owns 10 % of Earthworks, Inc