Effects of the flotation costs


Response to the following problem:

How do you think each of the following items would affect a company's ability to attract new capital and the flotation costs involved in doing so?

a) A decision of a privately held company to go public.

b) The increasing institutionalization of the "buy side" of the stock and bond markets.

c) The trend toward "financial conglomerates" as opposed to stand-alone investment banking houses.

d) Elimination of the preemptive right.

e) The introduction of "shelf registrations" in 1981.

 

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Cost Accounting: Effects of the flotation costs
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