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- Title
IMPLIED FIXED COSTS OF LONG-TERM DEBT ISSUES.
- Authors
Van Horne, James C.
- Abstract
The article presents a model which was developed for deriving the implied fixed cost of a bond flotation. For the study, the author uses a sample of electric utility companies over the 1961-1970 period. They also use implied fixed costs which are computed for 318 bond issues. The author states that there is a fixed component of flotation costs which corresponds to the fixed cost of ordering inventory. The article also discusses qualified assumptions and an empirical test. Several equations are presented to help illustrate the study.
- Subjects
BONDS (Finance); OVERHEAD costs; PUBLIC utilities; DEFAULT (Finance); SECURITIES; INTEREST rates
- Publication
Journal of Financial & Quantitative Analysis, 1973, Vol 8, Issue 5, p821
- ISSN
0022-1090
- Publication type
Article
- DOI
10.2307/2329985