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:

Work Sharing

A strategy aiming to reduce layoffs during slow periods by enabling employees to work reduced hours while partly compensating their reduced earnings with unemployment benefits.

Weekly Hours

The number of hours scheduled for work or assignment within a week.

Telecommuting Program

A work arrangement that allows employees to perform their job duties from outside the traditional office environment, often from home, facilitated by technological tools.

Satellite Office

denotes a secondary office located away from a company's main office, used to accommodate remote employees or serve different geographical areas.