How much will a firm receive in net funding from a firm commitment underwriting of 250,000 shares priced to the public at $40 if a 10% underwriting spread has been added to the price paid by the underwriter? Additionally, the firm pays $600,000 in legal fees.
A) $8,400,000
B) $8,460,000
C) $8,490,000
D) $8,545,455 Cost to public = $40
Net to issuer = $40/1.10 = $36.36
Therefore, the spread was $3.64 per share.
Correct Answer:
Verified
Q11: When a public company offers shares to
Q12: Money that is offered to finance a
Q13: A firm's first offering of stock to
Q14: The consent of a corporation's shareholders must
Q17: When underwriters are unsure of the demand
Q18: Major international commercial banks are:
A)Responsible for most
Q19: A secondary offering IPO occurs when:
A)New shares
Q20: The primary reason for an underwriters' syndication
Q21: If a corporation's management, with its superior
Q38: What would you expect to be the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents