Sandal Etc., Inc., needs to raise $49 million to finance firm expansion. In discussions with its investment bank, Sandals learns that the bankers recommend an offer price of $25 per share and that 2 million shares of stock be sold. If the net proceeds on the stock sale leaves Sandal with $49 million, calculate the underwriter's spread on the stock issue.
A) $0.50
B) $1.00
C) $2.90
D) $2.00
Correct Answer:
Verified
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