Volleyball Gear, Inc., with the help of its investment bank recently issued 1.5 million shares of new stock. The offer price on the stock was $18.50 per share and Volleyball Gear received a total of $26,917,500 through this stock offering. Calculate the net proceeds and the underwriter's spread on the stock offering. What percentage of the gross price is the investment bank charging Volleyball Gear for underwriting the stock issue?

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The underwriter's spread is the difference between the gross proceeds and the net proceeds. The gross proceeds are the total amount of money raised by the stock offering, which is $26,917,500. The net proceeds are the amount of money that Volleyball Gear receives after paying the underwriter's spread, which is $26,917,500 - $806,250 = $26,111,250. The underwriter's spread is therefore $806,250. The percentage of the gross price that the investment bank is charging Volleyball Gear for underwriting the stock issue is $806,250 / $26,917,500 * 100% = 3%.