Flotation costs as a percentage of the value of securities issued are ____ for ____ issues.
A)lower; small
B)lower; large
C)higher; large
D)lower; small AND higher; large

Question

Quizplus · Accepted Answer

Flotation costs as a percentage of the value of securities issued are typically lower for large issues because the fixed costs associated with issuing securities are spread over a larger amount of capital, reducing the cost per unit of capital raised.

Flotation Costs as a Percentage of the Value of Securities