Question

Underwriting commission will not be paid on shares taken by _____.

• A. Promoters
• B. Employees
• C. Directors
• D. All of the above

Answer 1

The correct option is D All of the above

Underwriting commission is the compensation that an underwriter receives for placing a new issue with investors. It is the fee which an investment banker charges for underwriting a security issue. It cannot be paid to any person on shares or debentures which are not offered to the public for subscription. Underwriting commission will not be payable on amounts taken up by the promoters group, employees, directors, their friends and business associates.