By using cash instead of stock, a company may diminish the perceived dilutive effects of a merger.

Name: By using cash instead of stock, a company may diminish the perceived dilutive effects of a merger.
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Question

Quizplus · Accepted Answer

If a company uses cash instead of stock to finance a merger, there will be no new shares issued, and existing shareholders' ownership stake in the company will not be diluted. Therefore, the perceived dilutive effects of the merger may be diminished.

By Using Cash Instead of Stock, a Company May Diminish