When additional stock is issued to finance implementation of strategy, ownership and control of the enterprise are strengthened.

Question

Quizplus · Accepted Answer

When additional stock is issued, it dilutes the ownership of existing shareholders and may also result in a change in control of the company. This can weaken their ownership and control, not strengthen it. However, issuing additional stock can provide the company with the funds needed to implement their chosen strategies.

When Additional Stock Is Issued to Finance Implementation of Strategy