You own 15 percent or 13,500 shares of Printers, Etc. These shares have a total market value of $426,600. 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 = $426,600/13,500 = $31.60New market value per share = [(90,000 F1F1F1S1F1F1F10 $31.60) + (10,000 F1F1F1S1F1F1F10 $30)]/(90,000 + 10,000) = $31.44Percent change = ($31.44 - $31.60)/$31.60 = -0.51 percent

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