In addition to direct costs, there are other costs associated with new security offerings. These other costs include all of the following EXCEPT _____.
A) incentives such as the "Green Shoe" option
B) overpricing
C) stock price declines
D) management time

Question

Quizplus · Accepted Answer

Overpricing is not considered a cost associated with new security offerings. Instead, it refers to setting the initial offering price of a security too high, which can lead to poor performance in the secondary market but is not a direct or indirect cost of issuing the security. Costs like the "Green Shoe" option, stock price declines, and management time are considered indirect costs related to issuing new securities.

In Addition to Direct Costs, There Are Other Costs Associated