The underwriter spread of stock is added to net proceeds to calculate the value of ___________?
Correct answer: B. Gross proceeds
- A. over writer spread
- B. Gross proceeds
- C. participation proceeds
- D. non participation proceedsCompare Futures Brokers
Explanation
Underwriting spread is deducted from gross proceeds to obtain net proceeds, so adding it back to net proceeds reconstructs gross proceeds. The other proceeds labels are not the standard accounting relationship.
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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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