Which One of the Following Statements Is Correct Concerning the Direct

question 73

Multiple Choice

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

• A) Domestic bonds are generally more expensive to issue than equity IPOs.
• B) The gross spread as a percentage of proceeds is the same for similar-sized IPOs and SEOs.
• C) A seasoned offering is always more expensive on a percentage basis than an IPO.
• D) There tends to be substantial economies of scale when issuing any type of security.
• E) The costs of issuing convertible bonds tend to be less on a percentage basis than the costs of issuing straight debt.

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