Before a seasoned stock offering, you owned 500 shares of a Vancouver firm that had 120,000 shares outstanding. After the seasoned offering, you still owned 500 shares but the number of shares outstanding rose to 135,000. This is an example of _____ dilution.

Question

Quizplus · Accepted Answer

This is an example of percentage ownership dilution because the number of shares you own remains the same, but the total number of shares outstanding has increased, thus reducing your percentage of ownership in the company.

Before a Seasoned Stock Offering, You Owned 500 Shares of a Vancouver