Issuing equity to raise capital is expensive because in addition to the compensation the financial intermediary requires,there will also be an expense as a result of the

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The underwriting discount is the fee charged by the investment bank or underwriter that facilitates the equity raise. This fee can be quite substantial, often ranging from 3 to 7 percent of the total amount raised. Therefore, issuing equity to raise capital is expensive, in part because of this underwriting discount. A, B, and C are not directly related to the expense of issuing equity.

Issuing Equity to Raise Capital Is Expensive Because in Addition