Computing percentage of the total value of the issue, Finance Basics

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Computing percentage of the total value of the issue

Problem:

Gallagher Corp. will issue 300,000 shares at a retail (public) price of $40. The company will receive $37.90 per share and incur $160,000 in out-of-pocket expenses.

a. What is the percentage spread?

b. What percentage of the total value of the issue (based on the retail price) are the out-of-pocket costs?

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Finance Basics: Computing percentage of the total value of the issue

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