Question
ABC is a small business that is owned by one owner (Owner #1) who owns 100% of the 10,000 shares of outstanding no par common
ABC is a small business that is owned by one owner (Owner #1) who owns 100% of the 10,000 shares of outstanding no par common stock. ABC is seeking additional funds to expand their business. Another investor (Owner #2) is willing to invest $100,000 in their business. The offer includes $75,000 cash in exchange for the issuance of 5,000 new shares of common stock and the remaining $25,000 cash would be lent to ABC in the form of a 5 year loan.
As a percentage, how much of ABC Company's outstanding common stock does the new investor (Owner #2) own after acquiring 5,000 new shares of common stock?
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