Suppose a firm is doing an IPO and the investment bank offers to buy the securities for
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Suppose a firm is doing an IPO and the investment bank offers to buy the securities for $39 per share with an offering price of $42. What is the underwriter’s spread? Assume that the underwriter’s cost of bringing the security to the market is $5 per share. What is the net profit?
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
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