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entire underwriting spread. A member of the syndicate is entitled to the underwriting fee and the concession. A broker dealer who is not a member of the syndicate but sells shares would receive only the concession, while the member of the syndicate who provided the shares to that broker dealer would retain the underwriting fee.
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Components of an underwriting spread in an initial public offering (IPO) typically include the following (on a per share basis): Manager's fee, Underwriting fee—earned by members of the syndicate, and the
Concession—earned by the broker-dealer selling the shares. The Manager would be entitled to the
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and the price at which securities are offered for sale to the public. It is the underwriter's gross
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Banking Representative Qualification Examination, Study Manual, 41st Edition
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