Which of the Following Statements Is False Regarding Flotation Costs

question 44

Multiple Choice

Which of the following statements is false regarding flotation costs?

• A)It is easier to account for flotation costs by treating them as negative cash flows
• B)They increase the required rate of return
• C)They are the costs of issuing new securities
• D)They involve real money

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Definitions:

Zenefits

A cloud-based software as a service (SaaS) company, which provides human resources services for small and medium-sized businesses, including payroll and benefits management.

Start-ups

New business ventures in their early stages, often characterized by innovation and designed to rapidly develop scalable business models.

Electronic Tendering

The process of conducting the tendering (or bidding) process online, including submission and review of bids, primarily to increase efficiency and reduce costs.

Suppliers

Entities or individuals that provide goods or services to other businesses or consumers, often playing a critical role in supply chains.