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Thursday, 01/15/2015 9:35:07 AM

Thursday, January 15, 2015 9:35:07 AM

Post# of 27486
When a company issues additional shares...


There are many scenarios in which a firm could require an equity capital infusion; funds may simply be needed to cover expenses. In a scenario where a firm does not have the capital to service current liabilities and the firm is hindered from issuing new debt due to covenants of existing debt, an equity offering of new shares may be necessary.

Growth opportunities are another indicator of a potential share dilution. Secondary offerings are commonly used to obtain investment capital that may be needed to fund large projects and new ventures.





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