Floatation cost refers to:
ACost of advertising
BCost of capital
CIssue expenses like underwriting, brokerage, registration etc
DTax on interest
Answer & Solution
Correct answer: C. Issue expenses like underwriting, brokerage, registration etc
1. Floatation cost = expenses incurred to issue securities (debt or equity).
2. Includes underwriting/brokerage fees, legal & administrative charges, registration fees, printing.
3. Adjusted from issue price to arrive at Net Proceeds.
_Source: ICAI BoS CA Inter Paper 6A, Ch 4 "Cost of Capital", §5.2_
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