Question : Which cost refers to the cost involved in issue of securities?
Option 1: Flotation cost
Option 2: Operating cost
Option 3: Both a and b
Option 4: None of the above
Correct Answer: Flotation cost
Solution : Flotation cost refers to the cost involved in the issues of securities for example underwriting commission brokerage stamp duty etc. Poms prefer securities with the least floatation cost.
Hence, Option A is correct.
Question : Which of the following statement is correct?
Option 1: Financial risk refers to risk of enability to meet a fixed operating costs.
Option 2: Business risk refers to risk of inability to meet fixed financial charges.
Option 3: Flotation cost refers to cost involved in the issue of securities.
Question : Which of the following statements is incorrect?
Option 1: The total risk depends on both the business risk and the financial risk.
Option 2: Issue of debt does not dilute the control of equity shareholders.
Option 3: Operating cost refers to the cost involved in issue of securities
Question : Aggregate supply refers to __________________.
Option 1: Actual output
Option 2: Desired output
Option 3: Both of the above
Question : Which of the following statement is incorrect?
Option 1: Primary market deals with issue of new securities by new companies.
Option 2: Primary market sells securities to the investors through an intermediary
Option 3: In the primary market both buying and selling of securities take place.
Question : Which organisation resists changes?
Option 1: Formal
Option 2: Informal
Option 3: Both (A) and (B)
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