Kevin Electronics needs to raise $30.00 million for business expansion. Its investment bank recommends an offer price of $75 per share, but Everest will receive $61 per share after underwriting fees. What is the underwriter's spread per share?

Kevin Electronics needs to raise $30.00 million for business expansion. Its investment bank recommends an offer price of $75 per share, but Everest will receive $61 per share after underwriting fees. What is the underwriter's spread per share?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation

Section: Chapter Questions

Problem 5P

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What is the underwriter's spread per share of this financial accounting question?

Kevin Electronics needs to raise $30.00 million for
business expansion. Its investment bank recommends an
offer price of $75 per share, but Everest will receive $61
per share after underwriting fees.
What is the underwriter's spread per share?

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