Different size offerings for issuance of additional shares


Question: Assume Safeguard Detective Company is thinking about three different size offerings for the issuance of additional shares.

Size of offer Public Price Net to Corporation

a. $1.5 million $50 $46.10
b. $5.5 million $50 $46.80
c. $20.0 million $50 $48.15

What is the percentage underwriting spread for each size offer?

What principle does this demonstrate?

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Finance Basics: Different size offerings for issuance of additional shares
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