Flotation costs
A) include the fees paid to the investment bankers, lawyers, and accountants involved in selling a new security issue.
B) encourage firms to pay large dividends.
C) are encountered whenever a firm fails to pay a dividend.
D) are incurred when investors fail to cash their dividend check.

Question

Quizplus · Accepted Answer

Flotation costs refer to the expenses incurred by companies when issuing new securities. These expenses typically include fees paid to the investment bankers, lawyers, and accountants involved in the process of selling the new securities.

Flotation Costs