Define flotation costs affect cost of raising that capital, Financial Management

Assignment Help:

When a company issues new securities, how do flotation costs affect the cost of raising that capital?

While a company issues new securities flotation costs raise the cost of raising the capital. The company receives a smaller amount of the carries on from the new issues, the greater the flotation costs.

Related Discussions:- Define flotation costs affect cost of raising that capital

Cost of retained earnings , Cost of Retained earnings (K ) Retained ea...

Cost of Retained earnings (K ) Retained earnings are that portion of EPS that is retained by the firm. This may be measured as the rate of return which the existing share hol

Explain the three kind’s non-financial incentives, Q. Explain the three kin...

Q. Explain the three kind’s non-financial incentives? Non-Financial incentives: Incentives which cannot be offered in terms of money are known as non-¬financial incentives. Ind

Estimating cash flows in valuation process, The first step in valuati...

The first step in valuation process is to estimate the cash flows that are expected to be received in the future. In debt securities, there are two types of possi

Operating cycle, discuss the applicability of operating cycle in poultry in...

discuss the applicability of operating cycle in poultry industry

Nominal interest rate, You are considering an investment in a 40-year secur...

You are considering an investment in a 40-year security. The security will pay $25 a year at the end of each of the first 3 years. The security will then pay $30 a year at the end

Treasury notes or t-notes, Treasury Notes or T-notes are the securiti...

Treasury Notes or T-notes are the securities issued with maturities of more than one year and but not more than 10 years. All these securities are coupon securiti

Pass-through vs. pay-through structures, In a pass-through structure,...

In a pass-through structure, each certificate holder will be allotted a proportion of the cash flow from the underlying pool of loans or receivables on a pro rat

Provisions for paying off bonds, The issuer of the bond has to repay ...

The issuer of the bond has to repay the bondholders the principal by the stated maturity date. This can be repaid by the issuer in one lumpsum payment at the matu

Fixed costs, Fixed Costs The costs a rigid incurs doing business that d...

Fixed Costs The costs a rigid incurs doing business that do not change in relation to production. Rent, for example, is a fixed cost because it remains constant whether product

Leverage, evaluate the importance of leverage in a small scale companyestio...

evaluate the importance of leverage in a small scale companyestion..

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages