Which of the Following Is the Correct Expression for the Amount

question 5

Multiple Choice

Which of the following is the correct expression for the amount of common stock or debt that a company needs to issue after taking into account the flotation costs?

• A) Amount of issue = (Net proceeds - Other flotation costs in dollars) / (1 - Percentage flotation costs)
• B) Amount of issue = (Net proceeds + Other flotation costs in dollars) / (1 - Percentage flotation costs)
• C) Amount of issue = (Net proceeds + Other flotation costs in dollars) / (1 + Percentage flotation costs)
• D) Amount of issue = (Net proceeds - Other flotation costs in dollars) / (1 + Percentage flotation costs)
• E) Amount of issue = (Net proceeds + Other flotation costs in dollars) × (1 - Percentage flotation costs)

---

Definitions:

Bankruptcy Judges

Judicial officers specialized in handling bankruptcy cases, with the authority to make legal judgments and decisions regarding bankruptcy filings.

Chapter 7

A section of U.S. bankruptcy law under which a debtor's assets are liquidated and proceeds distributed to creditors.

Unsecured Creditor

A creditor that extends credit without requiring specific collateral, bearing higher risk if the borrower defaults.

Claim

A demand for something due or believed to be due, typically a request for payment in accordance with an insurance policy or other formal agreement.