Crescent, Inc., is planning an IPO, and the investment bank offers to buy the securities for $21.50

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Crescent, Inc., is planning an IPO, and the investment bank offers to buy the securities for $21.50 per share and offer them to the public at $23.00. What is the gross underwriter’s spread? Assume that the underwriter’s cost of bringing the security to the market is $1.00 per share. What is the net profit?

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Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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