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A new sneaker company, Nikeness, is in desperate need of capital to fund their growth, which has been astronomical, following an endorsement deal with the
A new sneaker company, Nikeness, is in desperate need of capital to fund their growth, which has been astronomical, following an endorsement deal with the premier basketball player in the nation, Lebarndt George (aka King George), The CFO of Nikeness is considering issuing new stock to fund this growth. What issues regarding this transaction are true? A. The issuance of new equity may have a dilutionary effect on the existing stockholders, reducing the value of their holdings B. The issuance of bond or debt financing may be a less expensive alternative to a stock issuance. OC. Preferred stock may be a nice alternative to common stock, since preferred stock does not have a stated dividend rate to be paid. D. A and B above
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