Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued 9

Question

Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued 9.2 million shares of new stock. The offer price on the stock was $10.90 per share and Harper’s received a total of $96.60 million from the stock offering.

Calculate the net proceeds per share and the underwriter's spread per share on the stock offering. (Round your answers to 2 decimal places.)

What percentage of the gross proceeds is the investment bank charging Harper’s Dog Pens for underwriting the stock issue? (Round your answer to 2 decimal places.)

Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued 9.2 million shares of new stock. The offer price on the stock was $10.90 per share and Harper’s received a total of $96.60 million from the stock offering.

Explanation / Answer

Net proceeds=96.6/9.2= $10.5 per share,

Underwriter's spread= 10.9-10.5= $0.4 per share

Percent underwritng spread= 0.4/10.9= 3.67%

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