Question 1143971: An acquaintance of one of the authors was about to take his startup internet company public. He owned 5% of the 900,000 shares of stock that were issued when the company was first formed.
The board of directors decided to reward him by issuing additional stock so that he would then own 10% of the company. How many new shares of stock should be issued and then rewarded to him?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! he owned 5% of 900,000 = .05 * 900,000 = 45,000 shares.
let the number of additional shares be equal to x.
your formula becomes 45,000 + x = .10 * (900,000 + x)
simplify to get 45,000 + x = 90,000 + .10 * x
subtract 45000 from both sides of this equation and subtract .10 * x from both sides of this equation to get:
x - .10 * x = 90,000 - 45,000
combine like terms to get .90 * x = 45,000
solve for x to get x = 45,000 / .90 = 50,000
that should be your solution.
before the addition, he has 45,000 out of 900,000 = .05 = 5%.
after the addition, he has 95,000 out of 950,000 = .10 = 10%.
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