Facebook issues new stock worth $40 million for cash.This would not affect the shareholders' equity on the balance sheet because as new shares are sold the value of existing shares will decline by the same amount.
BT: Comprehension

Question

Quizplus · Accepted Answer

This statement is incorrect. The issuance of new shares would actually dilute the value of existing shares and would lower the shareholders' equity on the balance sheet.

Facebook Issues New Stock Worth $40 Million for Cash