Question

Which of the following is a cost of issuing securities: A)legal fees, filing fees B)losses related...

Which of the following is a cost of issuing securities:
A)legal fees, filing fees
B)losses related to underpricing
C)the spread
D)abnormal returns on seasoned offerings
E)all of the above
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Answer #1

Answer: A

A corporation can issue securities like bonds, equity shares, preference shares, and debentures. There are some costs associated with these issuances; these are legal fees to attorney, filing fees to SEC, etc.

Other options are not correct:

B: this is a strategic fault and would be considered as operational loss.

C: this is the difference between bid price and ask price, but not related to security issue.

D: this is an operational gain, but unrelated to issuance.

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