___________________ are comprised of direct costs, the spread, and underpricing.

Question

Quizplus · Accepted Answer

Flotation costs are comprised of direct costs such as legal and accounting fees, the spread (difference between the price paid by the underwriter and the price paid by investors), and underpricing (when the issue price is lower than the market price on the day of the IPO). Commission costs and brokerage commissions are specific types of direct costs within flotation costs.

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