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The underwriting commission in case of issue of debentures can’t exceed:
- a)3%
- b)2.5%
- c)4%
- d)5%
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
The underwriting commission in case of issue of debentures can’t...
According to Companies Act, underwriting commission should not exceed 5 per cent of the nominal value of a share and 2½ per cent in the case of debentures.
Most Upvoted Answer
The underwriting commission in case of issue of debentures can’t...
Vary depending on several factors such as the size of the issue, the creditworthiness of the issuer, market conditions, and the underwriting agreement between the issuer and the underwriter.
Typically, the underwriting commission is calculated as a percentage of the total value of the debenture issue. This percentage can range from 1% to 5% or more, depending on the complexity and risk involved in the debenture issue.
In addition to the underwriting commission, there may be other fees associated with the debenture issue, such as legal fees, marketing expenses, and administrative costs. These fees are usually borne by the issuer and can further impact the overall cost of the debenture issue.
It is important for issuers to carefully negotiate the underwriting commission and other associated fees with the underwriter to ensure a fair and competitive deal. Additionally, issuers should consider market conditions and the reputation and track record of the underwriter when selecting a suitable underwriter for their debenture issue.
Typically, the underwriting commission is calculated as a percentage of the total value of the debenture issue. This percentage can range from 1% to 5% or more, depending on the complexity and risk involved in the debenture issue.
In addition to the underwriting commission, there may be other fees associated with the debenture issue, such as legal fees, marketing expenses, and administrative costs. These fees are usually borne by the issuer and can further impact the overall cost of the debenture issue.
It is important for issuers to carefully negotiate the underwriting commission and other associated fees with the underwriter to ensure a fair and competitive deal. Additionally, issuers should consider market conditions and the reputation and track record of the underwriter when selecting a suitable underwriter for their debenture issue.
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The underwriting commission in case of issue of debentures can’t...
Option A 2.5% is the correct answer in case of debentures
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The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer?
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