All other things equal, when banks issue new stock, they

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When banks issue new stock, it dilutes the ownership of the bank. All other things equal, this means that each existing shareholder owns a smaller percentage of the company, which reduces the value of their shares. It does not necessarily impact reported earnings per share or the bank's ability to absorb operating losses. In fact, issuing new stock can increase the bank's capital and improve its ability to absorb losses.

All Other Things Equal, When Banks Issue New Stock, They