The cost of raising funds from the market is known as:
The cost of raising funds from the market is known as:
Solution
Option 1 -> Raising Cost is not a standard financial terminology used to describe the costs associated with raising funds from the market.
Option 2 -> Economic Cost refers to the total cost including both explicit and opportunity costs, which is a broader concept not specific to fund raising.
Option 3 -> Explicit Cost refers to direct out-of-pocket expenses involving actual cash payments, but this is too general and doesn't specifically relate to raising funds.
Option 4 -> Floatation Cost is the specific term for all expenses incurred when a company raises new capital by issuing securities, including underwriting fees, legal fees, and registration costs.
Hence, Option 4: Floatation Cost -> This is the standard financial term that specifically refers to the costs associated with raising new funds from the market through issuing securities like stocks or bonds. These costs include underwriting fees, legal expenses, registration fees, and other administrative expenses. -> correct
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