Question

Stockholders of a company may be reluctant to finance expansion through issuing more equity because leveraging with debt is always a better idea. their earnings per share may decrease. the price of the stock will automatically decrease. dividends must be paid on a periodic basis.

Answer 1

Their earnings per share may decrease.

Step-by-step explanation:

Shareholders of a company may be reluctant to finance expansion through issuing more equity because Their earnings per share may decrease and at the same time debt is always better option to finance.