Question

a small company has 10000 shares. Steven owns 50 of these shares. What is Stevens ownership percentage after the split

Answer 1

50 out of 10000 is 0.5%

Answer 2

Thanks for the help

Answer 3

No problem!

Answer 4

Or we can calculate it like this 50/10000 x 100 = 0.5

Answer 5

@dude Subject: math

Answer 6

Justus has the correct answer. Though the fraction written is before the split happens.

If we had a 2-for-1 split, then we have twice as many shares
Steven would then own 50*2 = 100 shares out of 2*10000 = 20000 total

So, 100/20000 = 0.005 = 0.5% is the same as before.

For an n-for-1 split, we can write
\(\Large \frac{n*50}{n*10000 } = \frac{50}{10000} = 0.005 = 0.5\%\)
where n is some positive whole number (such as n = 2). The equation above indicates it doesn't matter how the split happens. Steven will still retain the same ownership percentage. This is a good thing because if it was the case where stock splits dilute a person's ownership stake, then the company could effectively stock split their way to kicking someone out, in favor of someone else. This would be an unfair practice.

Answer 7

Great explanation!

Answer 8

Thanks I appreciate the compliments.