Assume that Crimson Company's market price per share remains at $20 over a two-year period.Over the same two-year period,Crimson sells an additional 100,000 shares of stock to investors.Net income was the same for both years.The issuance of additional shares will have the following effect for the company over the two-year period:

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Market capitalization is calculated as the market price per share multiplied by the total number of outstanding shares. By issuing an additional 100,000 shares, Crimson Company increases its total number of outstanding shares, thus increasing its market capitalization, assuming the market price per share remains constant at $20.

Assume That Crimson Company's Market Price Per Share Remains at $20