# Calculating Equity in Company A: 1.2% for $600,000.00 • MHB • Confused00901 In summary, a customer wants to own 1.2% of Company A's value, which equates to \$600,000. However, they only want to hold part of Company C, which is worth 60% of Company A's value. This means they must pay \$600,000 to buy 2% of Company C. Confused00901 Company A’s value is stated at$50,000,000.00 the company is set up into 2 separate entities Company B with 40% equity and Company C with 60% equity. If a customer wants to own 1.2% of Company A, but only wants to hold part of Company C at 60%, how much would the customer have to spend to buy 1.2% of Company A?

1.2% of Company A’s value of 50 million is 600,000

not clear what Company C’s equity of 30 million has to do with that 1.2%

They only want to buy into Company C, and not Company B. So what amount do they have to pay to invest in C since that company holds 60%?

Confused00901 said:
They only want to buy into Company C, and not Company B. So what amount do they have to pay to invest in C since that company holds 60%?

Purchasing 600,000 of equity from company C is still 1.2% of company A since C is contained within A.
Still not seeing how the equity shares of A held by B and C make any difference.

Last edited by a moderator:
I'll ask the accountant that question. Even though I own a business, I've never been involved in the money side of the business. This may have caused me to go bankrupt last year. I can't 100% blame the person who did all the accounting, but he should have warned me about possible financial difficulties. I had to consult with antonybatty.com for a month to restart the business successfully. Now I also work in the accounting industry, but it has become more difficult with the start of inflation worldwide.

I am interpreting he "only wants to hold part of Company C at 60%" to mean that he wants to buy only a share of company C, none of company B.

Company A is worth \$50,000,000. Company C is worth 60% of that, \$30,000,000. 1.2% of \$50,000,000 is \$600,000. He must buy $\frac{600000}{30000000}= 0.02$ or 2% of company C.

## 4. How does owning equity in a company benefit the owner?

Owning equity in a company can benefit the owner in several ways. They can receive a portion of the company's profits through dividends, have a say in company decisions, and potentially see an increase in the value of their equity if the company performs well.

## 5. Can equity in a company change over time?

Yes, equity in a company can change over time. If the company's value increases or decreases, the equity value will also change. Additionally, if the owner chooses to sell their equity or the company issues new shares, the equity percentage may change as well.

• General Math
Replies
10
Views
4K
• STEM Career Guidance
Replies
13
Views
3K
• General Discussion
Replies
2
Views
1K
• General Math
Replies
2
Views
6K
• Computing and Technology
Replies
1
Views
8K
• DIY Projects
Replies
13
Views
1K
• General Math
Replies
1
Views
2K
• General Math
Replies
9
Views
3K
• General Engineering
Replies
2
Views
1K
• Aerospace Engineering
Replies
6
Views
3K