Educational material from 
What you will learn
- Calculate ownership before and after two different company events.
- Track count, price and value in an explicitly isolated split model.
- Distinguish an ownership fraction from a certain forecast of the share price.
Session plan: two events, one starting position
Allow five minutes for the starting picture, ten for the split card, ten for the issue card, ten for comparison and five for an individual check. Students can draw 200 squares on graph paper and mark 20 as their ownership. A calculator is enough; the activity requires no registration or app account.
The company starts with 200 identical shares. An owner holds 20, or 10%. The model’s starting price is SEK 100 per share. Both cards restart from this position; card two does not continue from card one. Names, prices and terms are fictional and simplified.
Student cards: calculate before comparing
Card S: The company performs a 4:1 split. Each old share becomes four new shares. In our isolated model, the price is divided by four at the same time and no other price movement occurs. Calculate the owner’s count, company total, per-share price, ownership fraction and holding value. Ask whether the card includes any new payment.
Card N: Instead, the company issues 50 new shares at SEK 100 each. Initially the owner buys none. Calculate the total, ownership fraction and new capital received by the company. Then investigate the owner being allowed to buy five of those same 50 shares. These five are not added on top of the stated 50.
If the table does not fit, scroll it sideways.
| Item | Starting value |
|---|---|
| Owner’s count | 20 shares |
| Company total | 200 shares |
| Ownership | 10% |
| Model price | SEK 100 |
| Owner’s holding value | SEK 2,000 |
Answer key: a different subdivision or new capital
Card S gives the owner 80 shares out of 800. Ownership remains 80 / 800 = 10%. The model price is SEK 25 and 80 × 25 = SEK 2,000. The card includes no payment. A real share price can also be affected by the market; this table isolates the split’s mechanical effect while holding other changes aside.
Card N gives a total of 250 shares. An owner retaining 20 now holds 8%, a fall of two percentage points. The company receives 50 × 100 = SEK 5,000 before possible costs. Buying five of the 50 gives the owner 25 out of 250, or 10%, for a new payment of SEK 500. The total remains 250.
The issue card supplies no new market price. Ownership dilution therefore does not prove a particular price fall or a new holding value. Actual subscription rights, share classes, fees and procedures are also outside the stated conditions. The purpose is to check fractions and capital flows, rather than decide whether to participate in an offering.
If the table does not fit, scroll it sideways.
| Case | Owner’s count / total | Ownership |
|---|---|---|
| Start | 20 / 200 | 10% |
| 4:1 split | 80 / 800 | 10% |
| Issue, no purchase | 20 / 250 | 8% |
| Issue, purchase of five | 25 / 250 | 10% |
Teacher notes: identify who receives the new shares
If a student says the split quadruples wealth, ask for both count and price under the card’s conditions. If the issue total becomes 255 after participation, mark the five as part of the 50. If a fall from 10% to 8% is described as two percent, discuss percentage points and relative changes.
Ask for two short conclusions: what can be calculated and which price is still unknown. Assess a consistent starting picture, an explained denominator and a distinction between the company’s new capital and the owner’s payment. A virtual portfolio can provide context, but these event cards do not establish that the app implements these company events.
Try it yourself
An owner holds 30 of 300 shares. The company issues a total of 100 new shares at SEK 50 each. What is ownership without a purchase, and how many of those 100 preserve 10% ownership?
Show the solution and explanation
Without a purchase, ownership becomes 7.5%. The owner needs ten of the new shares and pays SEK 500 in the model.
30 / 400 = 7.5%. Owning 10% of 400 requires 40 shares: ten more than the original 30. Those ten are part of the issue’s 100 shares.
Check your understanding
Does the split card give the company SEK 5,000?
No. That amount comes from the issue card’s 50 new shares times SEK 100. The split card includes no capital contribution.
Does the ownership fraction alone tell you the market price after the issue?
No. The card provides counts and the issue price, but no observed new market price.
Practise with virtual money
Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.
How the practice portfolio worksKeep learning and practising
More activities on this topic
Calculate, interpret and evaluate sources
- Evaluate stock claims: a classroom activity with three statements
- Portfolio weights in the classroom: worksheet and answer key
- Money and percentages: a classroom worksheet with answers
- Read a stock chart in class: three claims and an answer key
- Inflation and purchasing power: a classroom basket worksheet
- Stock order fees: a classroom worksheet and cash-flow answers
- A paper stock-market game: two rounds, student journal and answers
Sources and examples
- Investor.gov: a split changes share counts proportionally
- Nordea: new shares and a changing total share count (in Swedish)
- Skolverket: mathematics, percentages, change factors and interpreting charts (in Swedish)
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
