Generally, the total cost to issue securities (as a percent of total proceeds)
A) is greater for common stock than for debt and increases as the size of the issue increases.
B) is greater for debt than for common stock and decreases as the size of the issue increases.
C) is greater for debt than for common stock and increases as the size of the issue increases.
D) is greater for common stock than for debt and decreases as the size of the issue increases.

Question

Quizplus · Accepted Answer

The total cost to issue securities is generally higher for common stock than for debt. This is because equity issuance often involves more complex regulatory and marketing efforts. Additionally, the costs as a percentage of the proceeds tend to decrease as the size of the issue increases, due to economies of scale in the issuance process.

Generally, the Total Cost to Issue Securities (As a Percent