dilution Hear it!

dilution definition - finance
A ubiquitous term that refers to a decrease in an investorÂ’s ownership level or a companyÂ’s market value, book value, or earnings per share. Ownership levels are diluted when additional shares are sold and existing shareholders donÂ’t buy the shares. An increase in the shares outstanding also dilutes a companyÂ’s book value and earnings per share. Often, merger transactions are said to be dilutive to current shareholders.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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