flotation cost

Flotation Cost

The costs that a company incurs when it makes a new issue of either stocks or bonds. Flotation costs include the costs of printing the certificates, paying the underwriters, government fees, and other associated costs. As new issues are intended to raise capital for the company, it is important for it to ensure that it will at least make back what it spends.

flotation cost

The expense involved in selling a new security issue. This expense includes items such as registration of the issue and payment to the investment banker. Flotation costs depend on the size and riskiness of an issue as well as on the type of security to be sold.
References in periodicals archive ?
For example factors influencing on the cost of new capital and retained earnings: flotation cost issue and effect of taxes on the cost of equity capital.
It incurred a restructuring and flotation cost of pounds 1.
i^ Utility i's expected cost of the monitoring process, as measured by the firm's historical average flotation cost incurred in selling common stock, expressed as a percentage of the gross proceeds.
Quarterly results showed preparation for the flotation cost pounds 15 million, adding to bottom-line losses in the three months to June 30.
This measure includes cash flotation costs (consisting of the underwriting spread and fees associated with administration, registration, and legal services) and underpricing.
Detailed operating cost estimates are currently being prepared but initial estimates show crushing, grinding and flotation costs of approximately US$10 per tonne and general and administration costs of about US$5 per tonne.
In May the firm announced full-year pre-tax profit before flotation costs and property transactions up 27 per cent to pounds 14.
RDF said pre-tax profits before flotation costs and one-off accountancy matters had risen 46% to pounds 2.
However, the deficit arose through investments to meet EU supply criteria, and the flotation costs, cleverly though these had been approached.
May Gurney, the support and construction services company which recently acquired Staffordshire-based mechanical and electrical engineering specialists AC Chesters & Son, has posted full-year pretax profit before flotation costs and property transactions up 27 per cent to pounds 14.
Their evidence indicates that flotation costs of debt and market volatility effect the choice.
8 million loss on the disposal of Carrington Wire, part of Acertec's BRC concrete steel reinforcements business, and flotation costs yielded a loss of pounds 3.