Two Stock Market Based Costs of Liquidity That Affects the Cost

question 23

Multiple Choice

Two stock market based costs of liquidity that affects the cost of capital are the:

• A)bid-ask spread and the specialist spread.
• B)market impact cost and the brokerage costs.
• C)investor opportunity cost and the brokerage costs.
• D)bid-ask spread and the market impact costs.
• E)None of the above.

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Definitions:

Skateboards

A narrow plank of wood mounted on wheels, used for recreational activity and transportation, typically steered by a rider's balance.

Consolidation

Consolidation refers to the process of combining several smaller entities, debts, or accounts into a single, more comprehensive unit for management efficiency.

Restructuring

The act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized.

Asset Purchase

An asset purchase involves buying the assets of a company, such as equipment, inventory, and property, rather than buying the company's stock.