Answered: Define each of the following terms:d.…

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Define each of the following terms:d. Flotation cost, F

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 14QTD

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Define each of the following terms:
d. Flotation cost, F

Expert Solution

Step 1

Primary market is the place where company sells or offers new equity shares to the investors. New issues refer to the securities which are registered, issued and sold for the first time in the market.

Step 2

The process where conversion of private company into a public company takes place through new issues is referred as flotation. By this process company raise funds by issuing new securities.

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