Author Question: When a firm issues new shares of stock (Read 60 times)

james · **on:** Apr 19, 2019

Question 1

A stock is

◦ a certificate that certifies ownership of a certain portion of a company.
◦ document verifying a loan to a company.
◦ a promise of capital gains to its owner.
◦ a retained earning of a corporation.

Question 2

When a firm issues new shares of stock

◦ it increases its debt load.
◦ it does not add to its debt.
◦ it must buy back existing shares of stock in return.
◦ it lessens the relative value of its net worth.

Toya9913 · **Reply #1 on:** Apr 19, 2019

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