Flotation Costs

question 54

Multiple Choice

Flotation costs

• A) include the fees paid to the investment bankers, lawyers, and accountants involved in selling a new security issue.
• B) encourage firms to pay large dividends.
• C) are encountered whenever a firm fails to pay a dividend.
• D) are incurred when investors fail to cash their dividend check.

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Definitions:

Spiral Wire Braid

A type of reinforcement used in hoses or cables, consisting of a spiral wrap of wire to provide strength.

ISO 32

A classification of industrial and hydraulic fluids, indicating a medium viscosity grade according to the International Standards Organization.

Viscosity Grade

A classification indicating the thickness or fluidity of a lubricant, with higher numbers denoting thicker oils.

SAE 20

A classification of motor oil viscosity defined by the Society of Automotive Engineers, suitable for use in certain engine types under specific conditions.