Question
1.Explain why the following statement is wrong Issuing new stock increases the number of shares outstanding and therefore reduces stock prices, since the stock price
1.Explain why the following statement is wrong
"Issuing new stock increases the number of shares outstanding and therefore reduces stock prices, since the stock price is equal to equity value divided by the number of shares outstanding."
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
