Flotation Costs Are

question 18

Multiple Choice

Flotation costs are:

• A) insignificant and can be assumed away.
• B) the difference between the bid-ask spread on the sale of the security.
• C) commissions to the underwriting firm that floats the issue.
• D) None of the options are correct.

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Definitions:

Adjusted Gross Income (AGI)

The total gross income minus specific deductions defined by the IRS, used to determine taxable income.

Qualifying Relative

A term used in tax law to describe someone who doesn’t have to live with the taxpayer all year but must meet certain financial support and income criteria to be claimed as a dependent.

Gross Income Test

A requirement for determining if someone can be claimed as a dependent, based on their income level.

Specific Tests

Refer to criteria or conditions applied to determine eligibility or compliance in various contexts, such as tax law or regulations.