RE: RE: RE: RE: Help Please Stockbagger, thanks for your example but:
1) Equity = Assets - Liabilities not Liabilities - Assets.
2) I agree totally that EQUITY does not change. So? The book value remains the same that was clear and agreed to in my example.
3) Further, the market cap also doesn't change. That was my assertion as well.
However, if you have twice the share count, with the market cap held constant, then clearly the mathematics suggests that the PRICE PER SHARE must adjust.
1M shares * $1/share = $1M market cap
OR
2M shares *
.50/share = $1M market cap
Book value and equity are the same. Market cap is the same. Price per share comes down to reflect genuine share dilution.