UNDERWRITERS DISCOUNT Definition

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UNDERWRITERS DISCOUNT is the differential between the price paid to the issuer for the new issue and the prices at which the securities are initially offered to the investing public.

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ZERO COUPON BONDS are bonds priced at a large discount from face value. The bonds mature at full face value so the difference between the original issue price and the face value represents interest income. The issuer of the zero coupon bond saves on cash flow since the interest isnt paid out until the end of the bond holding period.

GROSS RECEIPTS is the total amount received prior to the deduction of any allowances, discounts, credits, etc.

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