Posted On: 08/19/2015 2:02:05 PM
Post# of 41414
The company with less debt is definitely more valuable (Ceteris paribus).
That said, what is better for the INVESTORS of that company is another matter and depends on the company. If a company needs to dilute by 10% to gain a small amount of funding it can hurt. If a company needs to only dilute 5%, it's better for existing shareholders.
In general, the fewer shares sold the better for shareholders. From the companies perspective, it's not as important so long as they are getting the funds they need to become profitable in the future.
That said, what is better for the INVESTORS of that company is another matter and depends on the company. If a company needs to dilute by 10% to gain a small amount of funding it can hurt. If a company needs to only dilute 5%, it's better for existing shareholders.
In general, the fewer shares sold the better for shareholders. From the companies perspective, it's not as important so long as they are getting the funds they need to become profitable in the future.
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