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.

Understand the concept and purposes of cooperative business organizations.

Recognize the characteristics and function of joint stock companies.

Explain the features and legal implications of various business combinations such as business trusts, joint ventures, and incorporated cooperatives.

Identify the role and implications of syndicates in purchasing professional franchises.

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Definitions:

Stock Repurchase

A company's buying back of its own shares from the marketplace, which can reduce the number of outstanding shares and potentially increase the stock value.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, showing the portion of a company's profit allocated to each share of stock.

Stock Dividends

A form of dividend payment made by a corporation to its shareholders in additional shares rather than cash, affecting the company's stock price and equity structure.