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1. How do you think each of the following items would affect a company's ability to attract new capital and the flotation costs involved in doing so?

1. How do you think each of the following items would affect a company's ability to attract new capital and the flotation costs involved in doing so?

a. A decision of a privately held company to go public.
b. The increasing institutionalization of the "buy side' of the stock and bond markets.
c. The trend toward "financial conglomerates" as opposed to stand-alone investment banking houses.
d. Elimination of the preemptive right.
e. The introduction of "shelf registrations" in 1981.

Solution Preview

a. Attracting capital would become easier and floatation cost would decrease.

b. The increasing institutionalization of the "buy side" of the stock and bond markets should increase the ...

Solution Summary

A sentence explains each. No references.

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