Question: You are negotiating with your underwriters in a firm commitment offering of 10 million primary shares. You have two options: set the IPO price at

You are negotiating with your underwriters in a firm commitment offering

You are negotiating with your underwriters in a firm commitment offering of 10 million primary shares. You have two options: set the IPO price at $21.00 per share with a spread of 7%, or set the price at $20.30 per share with a spread of 5%. Which option raises more money for your firm? The net price to the firm of the first option is $ (Round to the nearest cent.) The net price to the firm of the second option is $ (Round to the nearest cent.) The option raises more money for your firm. (Select from the drop-down menu.)

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