Stockholders of a company may be reluctant to finance expansion through issuing more equity because

Question: Stockholders of a company may be reluctant to finance expansion through issuing more equity because

Question 17 options:

1. dividends must be paid on a periodic basis.
2. their earnings per share may decrease.
3. the price of the stock will automatically decrease.
4. leveraging with debt is always a better idea.

Answer and Explanation