___________________ are comprised of direct costs, the spread, and underpricing.
A) Commission costs
B) Flotation costs
C) Brokerage commissions
D) Registration costs

Question

Quizplus · Accepted Answer

Flotation costs include direct costs such as legal and accounting fees, the spread or difference between the offer price and the price the underwriter pays for the securities, and underpricing, which is the difference between the offer price and the market price at the time of issue. Commission costs and brokerage commissions are not the same as flotation costs, while registration costs refer to the expenses incurred in filing required documents with regulatory bodies.

___________________ Are Comprised of Direct Costs, the Spread, and Underpricing