Correct: investor’s share of new shares = ownership % × new shares

Mon, 04 May 2026 18:40:58 +0000

Why It’s Correct: Investor’s Share of New Shares Equals Ownership % × New Shares Issued When a company issues new shares, one of the most important principles in equity distribution is that an investor’s ownership percentage directly determines their share of the newly issued shares. The formula Investor’s Share of New Shares = Ownership Percentage × New Shares Issued is mathematically accurate and widely used in corporate finance, equity trading, and investment analysis. ### What Does the Formula Mean? - Ownership Percentage (also called stake or equity share percentage) represents the proportion of the company’s total shares held by a particular investor or group.
- New Shares Issued refers to the number of additional shares floated by the company, usually through private placements, secondary offerings, or equity raises.
- Multiplying ownership % by new shares issued gives the exact number of new shares the investor receives—ensuring proportional fairness based on existing ownership.