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Share options will increase the proportion of equity in capital structure and thus wacc Will increase as equity is expensive source of funding and this will decrease the value of the company. Please confirm it .thanks in advance
Share options will increase the proportion of equity when they are exercised.
According to M&M with tax, this should increase the WACC and therefore in isolation reduce the value of the company. However, the point of issuing the options in the first place will usually have been to encourage employees to have improved the profitability and hence the value of the company.
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