Anti Dilution Clause - Overview, Importance and Benefits | Provenience - 0 views
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provenience on 05 Oct 21Protects the investor equity - Every investor hopes for an increase in the value of his portfolio. However, the market conditions may result in significant losses or valuation swings in different market cycles. An Anti-dilution clause provides the investor protection and is usually considered an automatic right. It protects the investors from market insecurities even when the firm borrows more funds at a reduced cost, it will safeguard the initial investors. Protects the company- this clause always encourages and motivates the company to seek higher valuations at all times and incentivizes it to perform better towards this end. Hence increase in performance and capital expansion go hand in hand.