Calculating Costs of Issuing Stock 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's 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's for underwriting the stock issue?

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The underwriter's spread is the difference between the offer price and the net proceeds per share. In this case, the offer price is $18.50 and the net proceeds are $17.85 (calculated as $26,917,500 / 1.5 million shares). Therefore, the underwriter's spread is $0.65 per share. The percentage of the gross price that the investment bank is charging Volleyball's for underwriting the stock issue is calculated as ($0.65 / $18.50) * 100% = 3.51%.