What Is Share Dilution English

What Is Share Dilution?

Share dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. It typically results in a decrease in earnings per share and voting power for current shareholders, reflecting their reduced stake in the company.

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Share Dilution Meaning

Share dilution represents the decrease in existing shareholders’ ownership percentage due to the issuance of additional shares by the company. This process can dilute the value of existing shares by spreading the company’s earnings over a larger number of shares, leading to a potential decrease in the share price and the dilution of each shareholder’s voting power in company decisions.

Dilution is a critical concept for investors, as it affects both th