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which one of the following statements is correct concerning the direct costs of issuing securities? multiple choice domestic bonds are generally more expensive to issue than equity ipos. the gross spread as a percentage of proceeds is the same for similar-sized ipos and seos. a seasoned offering is always more expensive on a percentage basis than an ipo. there tends to be substantial economies of scale when issuing any type of security. the costs of issuing convertible bonds tend to be less on a percentage basis than the costs of issuing straight debt.

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The statement, "There tends to be substantial economies of scale when issuing securities" is the correct concerning the direct costs of issuing securities.

Securities can be issued in a variety of ways. Companies may choose to offer additional shares through a seasoned issue or a new issue, in which they release a security for the first time. Generally speaking, an issue usually refers to a specific offering. As an illustration, a set of 10 year bonds sold to the public by a company would be referred to as a single issue.

Selling stocks or issuing bonds are two options for a business in need of capital. The board of directors decides to issue more shares and increase the number of shares that are available on the market for trading in a secondary offering. The company receives all of the money from the public sales of additional shares.

Similar to this, a company may choose to issue bonds if it wants to move current debt while also generating new debt. Investors lend money to the business, which borrows it and pays it back with interest. The cost of borrowing for the corporation is decreased by the interest, which is a tax-deductible expense.

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