The underwriting fees charged by the investment bankers when a new security is issued are paid
A)by the new shareholders.
B)by both the old and the new shareholders, based on their percentage ownership interests.
C)by the old shareholders.
D)by all the existing investors in the firm, including the bondholders if it is a debt issue.

Question

Quizplus · Accepted Answer

The underwriting fees are typically paid by the issuing company, which is owned by the existing shareholders, thus effectively being borne by the old shareholders.

The Underwriting Fees Charged by the Investment Bankers When a New