Dilution Refers To

question 11

Multiple Choice

Dilution refers to:

• A)the increase in stock value due to wider ownership of stock.
• B)the loss in existing shareholder's equity.
• C)the loss in new shareholder's equity.
• D)the loss in all shareholder's equity, both existing shareholders and new shareholders.
• E)None of the above.

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Definitions:

Return On Equity

A financial ratio that measures the profitability of a company in relation to the shareholders' equity, indicating how efficiently a company uses its equity to generate profit.

Expected Rate

An estimated percentage or amount, often used in financial projections and calculations like the return on an investment or growth.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Debentures

Long-term debt instruments issued by corporations to borrow money, often secured only by the general creditworthiness of the issuer.