how is the underwriting fee determined?



0
how do companies determine underwriting fee?

1 Answer(s)


0

Underwriting is a reassurance to buy the unsubscribed shares , it mainly means to buy that part of issue which remains unsubscribed . This helps in two ways 

1. It sends a positive signal to the investors 

2 it reduces the risk 

UNDERWRITING FEE--It is an compensation for the sales effort as well as for the insurance taken by the investment bank . It is a function of the risk involved and the amount of capital to be deployed