Nigel decides to issue more shares to raise capital so that he can purchase a high-speed printer for his media business.What will be the repercussions of this decision?
A) voting control will decrease
B) voting control will be unaffected
C) financial risk will be higher
D) financial risk will be unaffected

Question

Quizplus · Accepted Answer

By issuing more shares, Nigel will be diluting the ownership of existing shareholders, thereby reducing their voting control. This is because each share represents a fraction of ownership and voting power in the company. Additionally, the financial risk will not necessarily be higher or unaffected, as it depends on how the additional capital is used and the overall financial situation of the company.

Nigel Decides to Issue More Shares to Raise Capital So