Question

In a corporate underwriting, which of the following would be considered consideration to the underwriter?

a) Blue sky fees
b) Marketing expenses
c) Printing fees
d) Issuer expenses

Answer 1

In a corporate underwriting, the consideration to the underwriter is their compensation, which typically includes issuer expenses. This compensation is part of the issuer's overall expenses for the underwriting service.

Step-by-step explanation:

In a corporate underwriting, consideration to the underwriter refers to the compensation they receive for their services in the process of issuing new securities. The consideration is usually a portion of the spread, which is the difference between the price at which the securities are bought from the issuer and the price at which they are sold to investors. Therefore, the correct answer is:

• d) Issuer expenses

The underwriter's consideration typically comes from the overall financing package that the issuer pays for the entire underwriting service, including but not limited to underwriter's fees. Unlike blue sky fees, marketing expenses, and printing fees, which are specific out-of-pocket costs related to the process of issuing, issuer expenses are more directly related to the underwriter's compensation.

Answer 2

In a corporate underwriting, blue sky fees, marketing expenses, and printing fees would be considered consideration to the underwriter.

Step-by-step explanation:

In a corporate underwriting, consideration to the underwriter can include several different types of expenses or fees. Among the options provided, blue sky fees, marketing expenses, and printing fees would all be considered consideration to the underwriter.

Blue sky fees refer to fees associated with registering securities with state authorities, marketing expenses include costs for promoting the securities to potential investors, and printing fees cover the costs of preparing the necessary documents and materials for the underwriting process.