The underwriter spread of stock is $17000 and the net proceeds of stock are $24000 then the gross proceeds are ____________?
Correct answer: A. 41000
- A. 41000
- B. 7000
- C. 17000
- D. 24000
Explanation
Gross proceeds equal net proceeds plus the underwriter’s spread, which is 24,000 + 17,000 = 41,000 dollars. The spread is the underwriting cost deducted before arriving at net 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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