a company attracted to what capital out of the following with reference to flotation cost
a) equity share capital
b) preference share capital
c) debt capital
d) non of these
Answers
Answered by
3
Answer:
a is the answer follow me
Answered by
0
Answer:
option :A is correct
Explanation:
According to wikipedia Flotation cost is the total cost incurred by a company in offering its securities to the public. It arises from expenses such as underwriting fees, legal fees and registration fees and Higher the flotation cost of a particular source, lower is its preference in the capital structure .
The flotation costs concept is strongly related to the concept of cost of capital and we can see two main approaches regarding this matter and these are as one is Incorporate flotation costs into the cost of capital and other is Adjust the company’s cash flows.
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