The Big Burger Co. has 225,000 shares of stock outstanding at a market price of $45. If the firm issues another 25,000 shares at a price of $40, what will happen to the market price of the stock?

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The market value of the outstanding shares before the new issue is $45 * 225,000 = $10,125,000. The market value of the new shares is $40 * 25,000 = $1,000,000. The total market value of all shares after the new issue is $10,125,000 + $1,000,000 = $11,125,000. The new total number of shares is 225,000 + 25,000 = 250,000. The new market price per share is $11,125,000 / 250,000 = $44.50. The market price has decreased by $45 - $44.50 = $0.50, which is a decrease of $0.50 / $45 = 1%.