Typically,a company employs the services of an underwriter:
A)if it has pre-marketed its shares before a new share issue.
B)to issue new shares at a discount.
C)if the shares are no-liability shares.
D)to take up any under-subscription of new shares.

Question

Quizplus · Accepted Answer

An underwriter is typically employed by a company to take up any under-subscription of new shares. This means that if the company issues new shares but not enough investors are interested in buying them, the underwriter will purchase any remaining shares to ensure that the offering is fully subscribed. Employing an underwriter is not typically related to pre-marketing shares, issuing shares at a discount, or offering no-liability shares.

Typically,a Company Employs the Services of an Underwriter