Flotation Costs as a Percentage of the Value of Securities

question 29

Multiple Choice

Flotation costs as a percentage of the value of securities issued are ____ for ____ issues.

• A) lower; small
• B) lower; large
• C) higher; large
• D) A and C

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Definitions:

Net Working Capital

A comparison of a company's short-term assets versus its short-term obligations, indicating its fiscal health in the immediate future.

Capital Cost Allowance (CCA)

A taxable expense in Canadian tax law that represents a yearly deduction for the depreciation of property used in a business or profession.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be converted to cash in the near-term.

Initial Cost

The initial expenditure involved in acquiring an asset or starting a project, before any operational or maintenance costs.