Question

An investor owns 5,000 shares, which is 1% of a corporation's outstanding stock before a stock repurchase. The investor did not sell any of his stock during the 25,000 share repurchase. Which one of the following statements is correct?

A. The investor still owns 1% of the corporation.
B. The stock's price is likely to drop by 5%.
C. The investor owns more than 1% of the corporation.
D. The investor now has 5,250 shares.

Answer 1

C. The investor owns more than 1% of the corporation.

Step-by-step explanation:

data provided in the question

Number of shares own = 5,000 shares

Outstanding stock percentage = 1%

Repurchased shares = 25,000

Based on the above information, the following statement is correct

i.e the investor owns more than 1% of the corporation as the A option, B and D options are incorrect and the option C is most appropriate option