New capital and the flotation costs


Question: 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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Finance Basics: New capital and the flotation costs
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