A firm that wishes to raise additional equity capital by selling a portion of the existing owners' stock while maintaining control of the firm should consider a ____.

Question

Quizplus · Accepted Answer

A separate class of nonvoting stock would allow the firm to sell a portion of existing owners' stock while maintaining control. By issuing nonvoting stock, the firm can raise funds without diluting its control over the company. A stock split would not raise additional capital, a stock dividend would not involve selling existing owners' stock, and a share repurchase would decrease the number of outstanding shares, but not necessarily raise additional capital.

A Firm That Wishes to Raise Additional Equity Capital by Selling