The under writer spread is subtracted from gross proceeds to calculate ___________?
Correct answer: D. net proceeds
- A. Gross proceeds
- B. cumulative proceeds
- C. non-cumulative proceeds
- D. net proceeds
Explanation
The underwriter's spread is the compensation deducted from the amount raised, so gross proceeds minus the spread gives net proceeds. Cumulative and non-cumulative describe dividend features, not underwriting proceeds.
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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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