The costs of underpricing an equity issue are borne mostly by the underwriter.

Name: The costs of underpricing an equity issue are borne mostly by the underwriter.
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The costs of underpricing an equity issue are mostly borne by the issuing company, as they receive less capital than they could have earned if the issue was priced higher. The underwriter may also incur some costs, such as reputation damage, but they typically receive their fee regardless of the pricing outcome.

The Costs of Underpricing an Equity Issue Are Borne Mostly