Which of the following does a firm consider in the choice of securities issued?
A) the tax consequences of the chosen security
B) the transactions costs of the chosen security
C) whether the chosen security will have a fair price in the market
D) All of the above are considered.

Question

Quizplus · Accepted Answer

A firm considers all three factors (tax consequences, transaction costs, and market price) when choosing which securities to issue. It is important to evaluate the tax implications of the chosen security, such as the tax rate, timing of tax payments, and potential tax deductions. Transaction costs such as underwriting fees and legal costs should also be considered. Lastly, it is important to ensure that the security will have a fair market price, so that the firm can obtain the necessary funding at an acceptable cost.

Which of the Following Does a Firm Consider in the Choice