On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows: Common Stock ($10 par value)$500,000 Retained Earnings 350,000 Total$850,000 On January 1, 20X8, Pisa purchased an additional 12,500 shares directly from Siena for $25 per share.Based on the preceding information, what is Pisa's new ownership interest?
A. 84 percent
B. 64 percent
C. 70 percent
D. 55 percent
Answer: B
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