A Commitment Fee Is

question 126

Multiple Choice

A commitment fee is

• A) an amount paid on the unused portion of a loan in a private placement.
• B) an amount paid by an investment banker to ensure the sale of securities.
• C) paid by investors to guarantee that a company will borrow from them.
• D) paid by bondholders to secure the right to convert bonds into common stock.

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Definitions:

Administrative Agencies

Governmental bodies responsible for the oversight and administration of specific functions and regulations.

Created by Statute

Formed or brought into existence by a formal law or statute.

Statute

A written law passed by a legislative body at either the federal or state level.

State Legislature

is the legislative body within a state that has the authority to make, amend, and repeal laws within that state.