Question: You are negotiating with your underwriters in a firm commitment offering of 8 million primary shares. You have two options: set the IPO price at

You are negotiating with your underwriters in a firm commitment offering of

8

million primary shares. You have two options: set the IPO price at

$24.00

per share with a spread of

8%,

or set the price at

$23.30

per share with a spread of

5%.

Which option raises more money for your firm?

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