Which one of the following is not a cost to the issuing firm of going public with an initial stock offering?
A) direct costs (legal fees, accounting fees, etc.)
B) underwriter's spread
C) overpricing
D) underpricing

Question

Quizplus · Accepted Answer

Overpricing is not a cost to the issuing firm, but rather a potential cost to the investors who purchase the stock at a higher price than its true value. Direct costs (such as legal and accounting fees), underwriter's spread, and underpricing (selling the stock at a lower price than its true value) are all costs to the issuing firm.

Which One of the Following Is Not a Cost to the Issuing