What is the underwriting spread per share and underpricing

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Reference no: EM131300401

Highlander Homes stock trades at $30 per share and there are 50 million shares outstanding. The management would like to raise $300 million in an SEO. If the underwriter charges 2% of gross proceeds, all other cost is $10 million and all the shares are primary shares sold to new investors, then

1. What is the underwriting spread per share?

2. What is the underpricing?

Reference no: EM131300401

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