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Query on UnderWriting, Very Urgent..
When we calculate underwriting comission on issue price, then what do we mean by Issue price.?
Is Securities Premium considered for purpose of calculating Underwriting comission..
If a share is issued at Rs. 12 including 2 Rs. Of security premium..
Then we will calculate U/w comission on Rs. 12 or Rs. 10..
Plz plz anyone tell me in detail..
Thanx
Replies (1)
Underwriting commission will be calculated on issue price irrespective of the face value of shares.
In your case it will be calculated on Rs.12 and not on Rs.10. Suppose, if a share is of face value of Rs.10 and is issued at par (Rs10) then underwriting commission will be calculated on Rs.10(Issue price) only.On the other hand if it is issued at a discount of Rs.2 i.e.Rs.8 then commission will be calculated on Rs.8(issue price) only.
Any brokerage, commission are provided on the issue price only.
Hope your query is resolved.......
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