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Is flotation cost is calculated on issue price?

Miradevi S

CA Final

★ 16K+

24-Oct-21 19:19

775

Answers (15)

Actually flotation cost is not calculated on the anything Floatation cost include all those cost incurred to make the shares available to the market Like brokerage, underwriting fee, administration charges etc

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 19:58

Christeena Ambel

*on the basis of anything

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 19:59

OK but if flotation cost is 5% then we calculate 5% right

Thread Starter

Miradevi S

CA Final

★ 16K+

24-Oct-21 20:08

Thread Starter

Miradevi S

OK but if flotation cost is 5% then we calculate 5% right

Actually it should be calculated on issue price.. But institute has calculated flotation cost on fair value..

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 20:13

On which sum

Thread Starter

Miradevi S

CA Final

★ 16K+

24-Oct-21 20:40

Thread Starter

Miradevi S

On which sum

This one. Last qn in new module

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Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 20:52

Which price we are taking in that we have to calculate flotation cost

Thread Starter

Miradevi S

CA Final

★ 16K+

24-Oct-21 20:56

Thread Starter

Miradevi S

Which price we are taking in that we have to calculate flotation cost

Face value

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 20:56

Christeena Ambel

Actually it should be calculated on issue price.. But institute has calculated flotation cost on fair value..

I said fair value by mistake.. Its face value

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 20:57

I told in any sum if we take MP then in that we calculate flotation cost but if we take issue price in that we calculate flotation cost

Thread Starter

Miradevi S

CA Final

★ 16K+

24-Oct-21 20:59

Thread Starter

Miradevi S

I told in any sum if we take MP then in that we calculate flotation cost but if we take issue price in that we calculate flotation cost

Sorry.. I didn't understand

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 21:01

In this sum we calculate flotation cost on issue price like that if we take market price on that we calculate flotation cost

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Miradevi S

CA Final

★ 16K+

24-Oct-21 21:09

Thread Starter

Miradevi S

In this sum we calculate flotation cost on issue price like that if we take market price on that we calculate flotation cost

I think u asked " on what Floatation cost is calculated only if market price is given instead of issue price" If this is the query Then, Floatation cost is incurred only when there is a fresh issue. If mp is given we don't reduce flotation cost. We take either MP or Net proceeds (issue-fc)

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 21:19

Okay...... thank you so much...... :)

Thread Starter

Miradevi S

CA Final

★ 16K+

24-Oct-21 21:22

Thread Starter

Miradevi S

Okay...... thank you so much...... :)

^_^

Christeena Ambel

CA Inter

★ 5K+

24-Oct-21 21:23