MANAGEMENT

Detailed explanation-1: -What Is a Flotation Cost? Flotation costs are incurred by a publicly-traded company when it issues new securities and incurs expenses, such as underwriting fees, legal fees, and registration fees. Companies must consider the impact these fees will have on how much capital they can raise from a new issue.

Detailed explanation-2: -Flotation costs are the costs that are incurred by a company when issuing new securities. The costs can be various expenses including, but not limited to, underwriting, legal, registration, and audit fees. Flotation expenses are expressed as a percentage of the issue price.

Detailed explanation-3: -Examples of Floatation Costs Flotation costs include legal fees, certificate printing fees, registration fees, stock exchange listing fees, and underwriting fees.

Detailed explanation-4: -What Is Flotation? Flotation is the process of converting a private company into a public company by issuing shares available for the public to purchase. It allows companies to obtain financing externally instead of using retained earnings to fund new projects or expansion.