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Question : Which of the following statement is correct?
Statement 1: Flotation cost refers to a temporary arrangement of finance that bridge the gap between the need of long term financer and to secure it.
Statement 2: Bridge financing means the expenditure incurred in issuing a security.

Option 1: Both are true 

Option 2: Both are false

Option 3: Statement 1 is true and statement 2 is false.

Option 4: Statement 1 is false and statement 2 is true.


 


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Both are false


Solution : Floatation cost means the expenditure incurred in issuing a security. This expenditure is made in brokerage under-writing commission advertising etc. Bridge financing refers to temporary arrangement of finance that bridge the gap between the need of long term finance and to secure it.

Hence, option B is correct.

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