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A company is issuing 4 million dollars in shares. The cost associated with the issuing of...

A company is issuing 4 million dollars in shares. The cost associated with the issuing of these shares is an example of:

a) EBITDA

b) depreciation

c) amortization

d) depreciation

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Answer #1

Option (b) and (d) given are same. May be there is a problem in the options given. However, the correct answer is Flotation costs. Flotations cost are the ones which are associated with the issuance of the shares.

Flotation costs are those costs which a company incurs whenever it issues the stock. These costs generally include such as underwriting fees, accounting fees , auditing fees, investment banking and legal fees and other fees which are paid to stock exchange in order to list the company's shares.

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