Answered

At Westonci.ca, we provide reliable answers to your questions from a community of experts. Start exploring today! Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

The managing underwriter has set the POP for a new issue offering at $50 per share. After negotiating, the proceeds to be received by the issuer upon closing are set at $48 per share. The managing underwriter will retain a management fee of $.25 per share and the selling concession has been set at $.75 per share. The spread is: A $2.00 B $1.25 C $1.00 D $.25

Sagot :

Answer:

A $2.00

Explanation:

The computation of the spread is shown below;

Spread represent the gross compensation made to the underwriters. It shows the difference between the Public Offering Price and the amount per share that was collected by the issuer.

So, it should be

= $50 per share - $48 per share

= $2 per share

hence, the correct option is a.

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.