Which One of the Following Statements Concerning Dilution Is Correct

Multiple Choice

Which one of the following statements concerning dilution is correct?

A) Dilution of percentage ownership occurs whenever an investor participates in a rights offer.
B) Market value dilution increases as the net present value of a project increases.
C) Market value dilution occurs when the net present value of a project is negative.
D) Neither book value dilution nor market value dilution has any direct bearing on individual shareholders.
E) Book value dilution is the cause of market value dilution.