What Is a Drawback of Using Only Equity to Raise

question 42

Multiple Choice

What is a drawback of using only equity to raise capital?

• A)The cost
• B)That it doesn't raise as much capital as debt financing
• C)Fluctuations in the stock market
• D)Dilution of the control of the company
• E)That it will cause EPS to roller- coaster

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Definitions:

Innocent Party

An individual or entity that is not at fault or involved in wrongdoing, especially in a legal context.

Fraud

A wrongful or criminal deception intended to result in financial or personal gain.

Authenticity

The quality of being genuine, original, or not a copy, often verified through evidence or certification.

Materially Different Meanings

Terms or phrases that have significantly divergent implications in different contexts or interpretations.