How Does the Size of an Issue Affect the Fees

question 79

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.
• E)Large issues involve a flat fee rather than a spread.

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Definitions:

Positive Influence

The effect or impact that encourages beneficial changes or development in others through positive actions, attitudes, or communication.

Motivation

The inner drive or factors that stimulate people to pursue personal or professional goals and exhibit persistent effort in achieving them.

External Environmental Actions

Activities or strategies undertaken by an organization to interact with or respond to its external environment, including market trends, regulatory changes, and other external opportunities or threats.

Advocating

The act of publicly supporting or recommending a particular cause or policy, often seen in leadership roles.