Definition
A fee charged by an underwriter for evaluating and assuming the risk involved in issuing new securities or loans.
What to consider
- Compare fees among different lenders or issuers.
- Consider how these fees affect the overall cost of financing.
- Review details carefully to avoid any hidden charges.
Real world scenarios
- Before issuing new shares, the company paid an underwriting fee to the investment bank, which covered the costs of managing the public offering.
Related terms
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