The ________ from the sale of a security are the funds actually received from the sale after ________.
A) gross proceeds; adding the after-tax costs
B) gross proceeds; reducing the flotation costs
C) net proceeds; reducing the flotation costs
D) net proceeds; adding the after-tax costs

Question

Quizplus · Accepted Answer

Net proceeds refer to the funds received from the sale of a security after deducting the associated costs, such as the flotation costs. Therefore, option C accurately describes the calculation of net proceeds by reducing the flotation costs. Adding after-tax costs is incorrect as taxes are not usually included in the computation of net proceeds.

The ________ from the Sale of a Security Are the Funds