Reduction of controlling power of existing equity shareholders in a company is a result of.
This question was previously asked in
Shift 25/05/2023 8:30 AM - 10:30 AM
A
Issue of new equity shares
B
Issue of new preference shares
C
Issue of new debentures
D
Issue of new bonds
Correct Answer
Issue of new equity shares
Detailed Explanation
The reduction of controlling power of existing equity shareholders in a company is a result of:
- Issue of new equity shares
When a company issues new equity shares, it dilutes the ownership stake of existing equity shareholders. As more shares are issued, each existing shareholder's ownership percentage in the company decreases, leading to a reduction in controlling power.
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