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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (177)	3/17/2003 3:59:47 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 445

Tim, If you issue more shares the stock gets diluted. If you dilute it enough the price of the shares will decrease as you are increasing the supply. At some point the price decreases to the point where the stock has to be delisted, or where the employees will refuse to take stock options instead of cash. You forgot about reverse stock splits. Anyway, in theory at least, every company action, including stock transactions, can be assumed to at least potentially maximize value for shareholders. An opportunity cost cannot exist if what is being given up does not have economic scarcity value or what is being prevented is not the most positively valued alternative. Regards, Don