Flotation cost is the total cost of issuing and selling a security. It reduces the net proceeds from the sale. Flotation cost has two components
i) Underwriting costs
ii) Administrative costs
i) Underwriting costs :- Compensation earned by the investment bankers for selling security.
ii) Administrative costs :- Issuers expenses like - legal, Accounting, Printing and other expenses.
Saturday, December 6, 2014
What is Flotation Cost
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