Equity Dilution Calculator

Formula

To calculate the equity dilution percentage:

D = ((ES - NS) / ES) × 100

Where:

D is the total dilution percentage
ES is the number of existing shares
NS is the number of new shares

What is Equity Dilution?

Equity dilution is defined as the reduction in the value of a stock or asset due to the addition of new stocks into the total pool available. In other words, it measures how much the percentage reduction in value would be if a certain number of shares were issued. This is important for investors to understand as it affects the value of their holdings.

Example Calculation 1

Let's assume the following values:

Number of Existing Shares (ES): 1000 shares
Number of New Shares (NS): 200 shares

Using the formula:

D = ((ES - NS) / ES) × 100 = ((1000 - 200) / 1000) × 100 = (800 / 1000) × 100 = 80%

Example Calculation 2

Let's assume the following values:

Number of Existing Shares (ES): 500 shares
Number of New Shares (NS): 50 shares

Using the formula:

D = ((ES - NS) / ES) × 100 = ((500 - 50) / 500) × 100 = (450 / 500) × 100 = 90%