Which One of the Following Statements Is Correct Concerning the Costs

question 264

Multiple Choice

Which one of the following statements is correct concerning the costs of issuing securities?

• A) Domestic bonds are generally more expensive to issue than equity IPOs.
• B) The total direct costs of an equity IPO is typically 15 % of the amount raised.
• C) A seasoned offering is typically more expensive on a percentage basis than an IPO.
• D) There tend to be substantial economies of scale when issuing securities.
• E) The costs of issuing bonds can be reduced to zero with the use of a "Red Shoe" provision.

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Definitions:

Drive-Reduction

A theory in psychology that explains motivation as being based on the goal of reducing needs created by physiological drives or states.

Homeostatic

Pertaining to homeostasis, the regulation of internal conditions within an organism to maintain stable, constant conditions for survival.

Bodily Needs

Basic physiological requirements for human survival, such as food, water, shelter, and sleep.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially in social and emotional contexts.