As founder and CEO of a growing public company,you are considering issuing shares of stock to finance an expansion.All of the following statements about stock are true except:
A)money obtained from the sale of stock does not have to be paid back.
B)if you issue stock instead of incurring debt to finance your expansion,you avoid paying interest.
C)if you issue stock to the public,your percentage ownership of the company will not change.
D)if the company does well,you could distribute some of its earnings by paying dividends.

Question

Quizplus · Accepted Answer

Issuing stock to the public dilutes the ownership percentage of existing shareholders, including the founder and CEO. If more shares are issued, the total number of shares increases, which means each share represents a smaller percentage of the company.

As Founder and CEO of a Growing Public Company,you Are