The Six Components That Make Up the Total Costs of a New

question 25

Multiple Choice

The six components that make up the total costs of a new issues are:

• A)the spread; other direct expenses such as filing fees; indirect expenses such as management time; economies of scale; abnormal returns and the Green Shoe option.
• B)the discount; other direct expenses such as filing fees; indirect expenses such as management time; due diligence costs; abnormal returns and the Green Shoe option.
• C)the spread; other direct expenses such as filing fees; indirect expenses such as management time; abnormal returns; underpricing and the Green Shoe option.
• D)the spread; other direct expenses such as filing fees; economies of scale; due diligence costs; abnormal returns and underpricing.
• E)None of the above.

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Definitions:

Reduced Rework

Strategies or practices aimed at minimizing the need to redo or correct work, thereby increasing efficiency and productivity.

Timing

The selection of the most appropriate or effective time to perform an action or release information.

Success

The achievement of a goal or the attainment of higher status or position.

Message

A piece of information or communication sent from one person or group to another, typically involving a sender, a message, and a recipient.