Companies will issue capital stock to raise funds that can be
subsequently used to expand business operations and create
additional shareholder value. When issuing stock to investors,
corporations will incur a number of costs, including:
- Professional Fees: includes those for
attorneys, as well as certified public accountants.
- Commissions: underwriters that place the
securities with investors will charge both fees for this service as
well as sales commissions.
- Clerical: includes both administrative and
clerical costs associated with preparing regulatory filings as well
as registrations.
- Filings: expenses and fees associated with
filing the issue with the Securities and Exchange Commission.
- Marketing: advertising, mailing, and marketing costs associated
with promoting the securities to investors.