Which of the following is not included in additional fees for the underwriting spread of a security issue?Multiple choice question.auditlegalbroker spreadlisting
Question
Which of the following is not included in additional fees for the underwriting spread of a security issue?Multiple choice question.auditlegalbroker spreadlisting
Solution
The underwriting spread of a security issue typically includes several types of fees. Here's a brief explanation of each option:
a) Audit: This is often included in the underwriting spread. It refers to the cost of having the company's financial statements reviewed by an independent third party.
b) Legal: This is also typically included. It refers to the cost of legal services related to the issuance of the security.
c) Broker spread: This is the main component of the underwriting spread. It's the difference between the price the underwriters pay the issuer for the securities and the price at which the securities are sold to the public.
d) Listing: This refers to the cost of getting the security listed on a stock exchange. While this is a cost associated with issuing a security, it is not typically considered part of the underwriting spread.
So, the answer to your question is d) Listing. This cost is not usually included in the underwriting spread.
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