What Is a Drawback of Using Only Equity to Raise

question 57

Multiple Choice

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

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

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Definitions:

Nocebos

Refers to a detrimental health effect that results from negative expectations of the patient and is the counterpart to the placebo effect.

Placebo Response

A beneficial health outcome resulting from a person's expectation of treatment rather than from the actual treatment itself.

Expectancy

The anticipation or belief about what is likely to happen in the future.

Conditioning

A process of behavior modification by which a subject comes to associate a desired behavior with a previously unrelated stimulus.