dilution of equity

dilution of equity
An increase in the number of ordinary shares in a company without a corresponding increase in its assets or profitability. The result is a fall in the value of the shares as a result of this dilution. The percentage of the equity held by an individual shareholder (and hence his or her voting power) will also be reduced.

Big dictionary of business and management. 2014.

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  • dilution — (1) The difference between gross sales and net sales. Dilution is caused by sales that are reversed as a result of returns and/or allowances. (2) The reduction in an existing stockholder s position that results from the issuance of new shares.… …   Financial and business terms

  • Dilution — Diminution in the proportion of income to which each share is entitled. The New York Times Financial Glossary * * * dilute di‧lute [daɪˈluːt] verb [transitive] FINANCE if a company dilutes its shares or the earnings on its shares, it increases… …   Financial and business terms

  • equity dilution — See dilution of equity …   Big dictionary of business and management

  • dilution — di·lu·tion /dī lü shən, də / n 1: a lessening of real value (as of equity) by a decrease in relative worth; specif: a decrease of the value per share of common stock caused by an increase in the total number of shares 2: a lessening of the value… …   Law dictionary

  • dilution limits — The limits to the number of shares a company may issue under its equity based incentive plans. The limits typically refer to an overall number of shares that may be issued at any given time, for example 10% of issued share capital over a ten year …   Law dictionary

  • dilution protection — Standard provision that changes the conversion ratio in the case of a stock dividend or extraordinary distribution to avoid dilution of a convertible bondholder s potential equity position. Adjustment usually requires a split or stock dividend in …   Financial and business terms

  • dilution — A reduction in *value. In the case of *common stock, dilution refers to a reduction in the value of a *stockholder’s share of *equity or a reduction in the proportion of shares held by a stockholder. This can occur when a corporation issues… …   Auditor's dictionary

  • equity dilution — A reduction in the percentage of the equity owned by a shareholder as a result of a new issue of shares in the company, which rank equally with the existing voting shares …   Accounting dictionary

  • dilution — noun Date: 1646 1. the action of diluting ; the state of being diluted 2. something (as a solution) that is diluted 3. a lessening of real value (as of equity) by a decrease in relative worth; specifically a decrease of per share value of common… …   New Collegiate Dictionary

  • Stock dilution — is a general term that results from the issue of additional common shares by a company. This increase in common shares of a stock can result from a secondary market offering, employees exercising stock options, or by conversion of convertible… …   Wikipedia

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