Underwriting Discount
Content
Definition
Underwriting Discount refers to the fee charged by underwriters when they agree to buy and resell shares at a certain price, typically in an IPO process.
Usage and Context
Underwriting discount is the fee charged by underwriters when selling shares, usually in an IPO.
Frequently asked questions
- What is an underwriting discount? An underwriting discount is the fee charged by underwriters for helping to bring a new issue to market.
- What are the underwriting fees for IPO? Underwriting fees for an IPO typically range from 3% to 7% of the total offering amount, paid to underwriters for managing and distributing the shares.
- What is the underwriting agreement in an IPO? The underwriting agreement in an IPO is a contract between the issuing company and underwriters, where underwriters agree to buy and sell the company`s shares to the public.
Benefits
An underwriting discount shows costs incurred by underwriters, affecting IPO proceeds.
Conclusion
An underwriting discount reflects the costs incurred by underwriters, affecting proceeds from an IPO.
