The difference between net proceeds and gross proceeds is called __________?
Correct answer: C. under writer spread
- A. non-participating spread
- B. participating spread
- C. under writer spread
- D. over writer spread
Explanation
The underwriter’s spread is the difference between the price paid to the issuing company, or net proceeds, and the price at which the securities are sold to investors, or gross proceeds.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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