The Total Direct Costs of Underwriting an Equity IPO

Multiple Choice

The total direct costs of underwriting an equity IPO:

A) tends to increase on a percentage basis as the proceeds of the IPO increase.
B) is generally between 7 and 8 percent, regardless of the issue size.
C) can be as high as 25 percent for small issues.
D) excludes the gross spread.
E) excludes both the gross spread and the underpricing cost.