How Does the Size of an Issue Affect the Fees

question 29

Multiple Choice

How does the size of an issue affect the fees charged by underwriters?

• A)Although large issues generally have a smaller spread,the large number of shares released means that the total fees are somewhat larger than for smaller issues.
• B)Large issues generally have a similar spread to small issues and thus attract much greater fees.
• C)Large issues have a reduced spread,which means that the total fees are generally the same as for smaller issues.
• D)Large issues have substantially larger direct costs and,thus,must charge a larger spread in order to be profitable for the underwriter.

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Definitions:

Globalization Strategy

A globalization strategy is an approach adopted by organizations intending to operate and compete on a global scale, often involving diversifying markets, sourcing, and product offerings internationally.

Global Strategy

A plan developed by an organization to operate and compete in international markets.