Capital Markets (ECM / DCM)
An issuer sells 10.0m primary shares at a $20.00 offer price with a 7% gross spread. How much cash does the company receive, and what is the gross spread in dollars?
Model answer
Gross proceeds = 10.0m × $20.00 = $200.0m. Gross spread = 7% × $200.0m = $14.0m. Net proceeds to the company = $200.0m −…
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