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What is meant by the underwriting spread

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You work for Home Depot, a rapidly-growing retailer of home improvement and construction supplies. Home Depot is contemplating acquiring new capital with either an offering of new debt or new equity. Your job is to attend preliminary negotiations with investment bankers and provide a report to your firm's board of directors regarding the process of acquiring capital. Explain the following.

1) What is meant by the underwriting spread?

2) Home Depot may issue either debt or equity. Is the underwriting spread typically higher for debt, higher for equity, or the same for both debt and equity?

Reference no: EM132999952

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