Calculating Costs of Issuing Stock Your company needs to raise $50 million to finance plant expansion. In discussions with its investment bank, you learn that the bankers recommend a gross price of $75 per share and that 675,000 shares of stock be sold. If the net proceeds on the stock sale leave your company with $50 million, what is the underwriter's spread per share on the stock issue?

a). $0.93
b). $1.85
c). $6.67
d). $9.00

Answer rating: 100% (QA)

Underwriting spread is the income received by the underwriters such as investment banks by selling t... View the full answer