Practicing Success
Reduction of controlling power of existing equity shareholders in a company is a result of: |
Issue of new equity shares Issue of new preference shares Issue of new debentures Issue of new bonds |
Issue of new equity shares |
The correct answer is Option (1) - Issue of new equity shares. 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. |