Other things being constant, when a business issues more stock, which of the following happens?
A)The supply of the stock is greater and thus the price will fall.
B)The supply of the stock is less and thus the price will rise.
C)The demand for the stock is greater and thus the price will rise.
D)The demand for the stock is less and thus the price will fall.

Question

Quizplus · Accepted Answer

When a business issues more stock, the supply of the stock increases, leading to a decrease in price due to the higher supply. This is based on the principle of supply and demand, where an increase in supply leads to a decrease in price, and a decrease in supply leads to an increase in price.

Other Things Being Constant, When a Business Issues More Stock