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Firms Encounter Several Costs When Issuing New Securities

question 8

Essay

Firms encounter several costs when issuing new securities.Identify and describe at least four of these costs.


Definitions:

Manufacturing

The method of transforming unprocessed materials, components, or parts into complete products that satisfy the demands or criteria of a customer.

Economic Sector

A division within an economy, specifying the type of activity or services performed, such as agriculture, manufacturing, or services.

Postindustrial Societies

Societies that are characterized by an economy dominated by the service sector and information technology, rather than industrial manufacturing.

Financial Leverage

The use of borrowed capital (debt) in addition to equity to finance a company's assets, aiming to increase the return on equity.

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