ABC Company has 100,000 authorized number of common stock, which 80,000 shares were issued and outstanding. The company issues 20,000 additional shares to other people, Mr. Go’s ownership in the company is 5,000 shares. Should Mr. Go did not exercised the pre-emptive right, how much is the dilution in his ownership interest in the company? a. 25% b. 0 c. 1.25% d. 20%
ABC Company has 100,000 authorized number of common stock, which 80,000 shares were issued and outstanding. The company issues 20,000 additional shares to other people, Mr. Go’s ownership in the company is 5,000 shares. Should Mr. Go did not exercised the pre-emptive right, how much is the dilution in his ownership interest in the company? a. 25% b. 0 c. 1.25% d. 20%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Company has 100,000 authorized number of common stock, which 80,000 shares were issued and outstanding. The company issues 20,000 additional shares to other people, Mr. Go’s ownership in the company is 5,000 shares. Should Mr. Go did not exercised the pre-emptive right, how much is the dilution in his ownership interest in the company?
a. 25%
b. 0
c. 1.25%
d. 20%
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