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Home > Finance > Question

A company that does not want to dilute ownership may issue:

0
A) Preference shares
B) Equity shares
C) Stock dividends
D) Debentures

Correct Answer: D) Debentures

• A company that strictly wants to aggressively raise capital without diluting ownership should issue Debentures. • Debentures are long-term debt instruments that strictly do not grant any corporate Voting rights. • Issuing massive new common equity shares directly dilutes the existing owners' Percentage of control. • Preference shares guarantee fixed dividends but generally also completely lack Voting power. • The heavy interest paid on issued corporate debentures is legally Tax-deductible.

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