Stockholders of a company may be reluctant to finance expansion through issuing more equity because leveraging with debt is always a better idea. their earnings per share may decrease. the price of the stock will automatically decrease. dividends must be paid on a periodic basis.

Question

Albert Potts

Business

23 June, 00:50

Stockholders of a company may be reluctant to finance expansion through issuing more equity because leveraging with debt is always a better idea. their earnings per share may decrease. the price of the stock will automatically decrease. dividends must be paid on a periodic basis.

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Answers (1)

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Yasmine York · Answer 1

Their earnings per share may decrease.

Explanation:

Shareholders of a company may be reluctant to finance expansion through issuing more equity because Their earnings per share may decrease and at the same time debt is always better option to finance.