In order to find the present value of the tax shields provided by debt, the discount rate used is the:

A$.$ cost of capital

B$.$ cost of equity

C$.$ cost of debt

D$.$ none of the above

Why the costs of selling equity so much larger than the costs of selling debt?

A$.$ Debt is easier to price

B$.$ Equity return has less volatility

C$.$ Company has more access to the IPO market

D$.$ None of the above

Which is NOT the benefit of getting listed?

A$.$ Better access to the equity market

B$.$ Existing shareholders gain liquidity

C$.$ Better publicity

D$.$ Separation of ownership and control

Which statement below is TRUE?

A$.$ Underwriters are usually controlled by the government.

B$.$ Underwriters help to determine the offering price.

C$.$ The maximum number of underwriters is two in an IPO.

D$.$ The underwriters do not buy securities from issuing firm.

Which of the following is correct about ordinary share capital?

A$.$ Usually there is no obligation to pay dividends

B$.$ The capital does not have to be repaid

C$.$ Both A & B

D$.$ None of the above

According to research, which of the following is given by CFO's as the largest cost area for "going public"?

A$.$ Increased Costs of Financial Reporting

B$.$ Increased Legal Costs

C$.$ Increased Costs of Regulatory Compliance

D$.$ Incremental Auditing Fees