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Assignment:

DiPitro's Paint and Wallpaper, Inc., needs to raise $2.870 million to finance plant expansion. In discussions with its investment bank, DiPitro's learns that the bankers recommend a gross price of $44 per share and that 70,000 shares of stock be sold. The net proceeds on the stock sale leaves DiPitro's with $2.870 million.

Task:

Question 1: Calculate the underwriter's spread in dollars per share on the stock issue.

Question 2: Calculate the underwriter's spread in percentage on the stock issue.

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162615

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