The influx of equity can complicate valuation calculations. For instance, the valuation may increase
2. Pressure to Deliver Returns
Equity investors expect significant returns, either through dividends or stock appreciation. This pressure can push management toward short-term profit strategies that may not align with long-term objectives.
3. Complex Valuation Adjustments
The influx of equity can complicate valuation calculations. For instance, the valuation may increase due to higher cash reserves but decrease if investors perceive excessive dilution or inefficient use of funds.