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Pete Inc. purchased 80% of Paul Co. for $270,000 when Pauls book value was $300,000....

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Question

Accounting

Pete Inc. purchased 80% of Paul Co. for $270,000 when Pauls book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000.

Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share.

What is the new percent ownership Pete owns in Paul?

80.0%.

87.5%.

90.0%.

75.0%.

82.5%.

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