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A drawback of using only equity to raise capital is.....?

a.the cost
b.fluctuation in the stock market
c.dilution of the control of the company
d.that it will cause EPS to roller-coaster

I would have to say, C.

It seems like if you keep selling shares or whatever, you will sooner or later be outnumbered by those shareholders, and if they vote...well, you might get voted out, lol.

c

Issuing equity affects ownership of the company. External fionance means control is retained.

The main reason is leveraging capital, but that is not an option.

1) interset of equity is higher than debt.

2) u need to pay taxes on capital gains of equity while they deduct interest paid on debt before u pay taxes

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