Capital Markets (ECM / DCM)
What is the gross spread (underwriting discount) in an IPO, and what is the rough convention for mid/large U.S. IPOs?
Model answer
The gross spread is the underwriters' fee — the difference between the price paid to the issuer and the price sold to the public, expressed as a percent of gross proceeds. The classic rule of thumb…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 2,300+ — or go Pro for unlimited reps.
Pro unlocks every model answer — $19.99/mo.
More from Capital Markets (ECM / DCM)
- Why does a company go public (IPO)? Give the main pros and cons.
- Walk me through the IPO process from start to finish at a high level.
- What is bookbuilding and how does the roadshow feed into it?
- How is the final IPO offer price determined?
- Why are IPOs often deliberately underpriced?
- What is the greenshoe (over-allotment option) and how does it work mechanically?
Try the real thing
1 / 3Valuation: Comps & Precedents
What are the main valuation methodologies?
Superday coming up? Take the cheat sheet.
The technicals and stories to have cold before you walk in — free, one email, no mailing list.
Free tier: 20 cards + 10 daily reps + ALL drills — no credit card required.