Problemdipitros paint and wallpaper inc needs to raise 2870, Ask an Expert

Accounting

Problem:

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.

Requirement:

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: Please provide reasons to support your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173288

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