In general, issuing equity may not dilute the ownership of existing shareholders if

Question

Quizplus · Accepted Answer

If the new shares are sold at a fair price, then the ownership of existing shareholders will not be diluted. Dilution occurs when new shares are sold at a lower price than their fair value, which would decrease the value of existing shares and dilute ownership. Therefore, if the new shares are sold at a fair price, existing shareholders will not experience a decrease in ownership.

In General, Issuing Equity May Not Dilute the Ownership of Existing