Which of the following is NOT an advantage of common stock financing?
A) no fixed dividend obligation
B) lowers the firm's weighted cost of capital
C) a greater degree of flexibility for the firm in financial planning
D) relatively high flotation costs

Question

Quizplus · Accepted Answer

Relatively high flotation costs is not an advantage of common stock financing. Flotation costs refer to the expenses incurred by a company in issuing new securities, such as underwriting fees, legal fees, and registration fees. Common stock financing typically incurs higher flotation costs compared to debt financing. The other options listed are advantages of common stock financing.

Which of the Following Is NOT an Advantage of Common