What%age of Direct Expense Is Required to Market Stock If

question 84

Multiple Choice

What%age of direct expense is required to market stock if the issuer incurs $1 million in other expenses to sell 3 million shares at $34 each to an underwriter and the underwriter sells the shares at $40 each?

• A)6.98%
• B)7.19%
• C)7.75%
• D)8.33% underwriting spread 3 million x $3 = $9 million

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