_________________ is a danger faced by the stockholders of an acquiring firm in a merger if excessive numbers of new shares are issued relative to the value of their old shares.

Question

Quizplus · Accepted Answer

Dilution of ownership occurs when an acquiring firm's new shares are issued in such large numbers that the original stockholders' proportionate ownership in the firm declines. This can happen if the value of the old shares is higher than the value of the new shares, which reduces the stockholders' overall value and may negatively affect their control over the merged company.

_________________ Is a Danger Faced by the Stockholders of an Acquiring