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Using funds raised through commercial paper to meet floatation costs of a bigger issue is called:
ABridge financing
BBonus financing
CBuffer financing
DBlanket financing
Answer & Solution
Correct answer: A. Bridge financing
1. Floatation costs include brokerage and advertising.
2. The short-term paper bridges the gap.
3. That is bridge financing.
_Source: NCERT Class 12 Business Studies Part II, Chapter 10, Financial Markets._
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