You own 15 percent or 13,500 shares of Printers,Etc.These shares have a total market value of $435,000.By what percentage will the total value of your investment in this firm change if the company sells an additional 10,000 shares of stock at $30 a share and you do not buy any?

Question

Quizplus · Accepted Answer

Current number of shares outstanding = 13,500/0.15 = 90,000Price per share = $435,000/13,500 = $32.22New market value per share = [(90,000 × $32.22) + (10,000 × $30)]/(90,000 + 10,000) = $32.00Percent change = ($32.00 - $32.22)/$32.22 = -0.69 percent

You Own 15 Percent or 13,500 Shares of Printers,Etc