stock dilution

What is stock dilution?

Companies may need to raise capital and instead of borrowing, they can issue a share purchase plan or convertible securities. The benefit of these methods is that they do not take on more debt. However, the downside is that this can cause the stock to dilute. In this article we explain what a stock dilution is and the consequences when this occurs. Why do companies dilute their stock? Companies may issue share purchase plans to raise capital to fund a …

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