When a Firm Issues New Stock, It Always Results in a Dilution

question 103

True/False

When a firm issues new stock, it always results in a dilution of earnings in the long run.
When dilution occurs because of a new issue, it typically takes time for the new equity infusion to boost earnings per share, but this condition is temporary in most cases.

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Definitions:

Tax Cut

A reduction in the amount of taxes imposed by a government, often aimed at stimulating economic growth or achieving political goals.

Great Depression

A severe worldwide economic depression that took place during the 1930s, beginning in the United States.

Tax Cut

A reduction in the amount of taxes imposed by the government.

Fiscal Policy

involves government spending and tax policies to influence economic conditions, including levels of employment, inflation, and economic growth.