Question

Assume Sybase Software is thinking about three different size offerings for issuance of additional shares.

Size of Offer				Public Price				Net to Corporation
a.	$	2.6	million		$	46			$	42.70
b.		8.0	million			46				43.48
c.		28.0	million			46				43.50

What is the percentage underwriting spread for each size offer? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
  

Answer 1

a. The % underwriting spread is computed as shown below:

= (Public price - Net to Corporation) / Public price

= ($ 46 - $ 42.70) / $ 46

= 7.17% Approximately

b. The % underwriting spread is computed as shown below:

= (Public price - Net to Corporation) / Public price

= ($ 46 - $ 43.48) / $ 46

= 5.48% Approximately

c. The % underwriting spread is computed as shown below:

= (Public price - Net to Corporation) / Public price

= ($ 46 - $ 43.50) / $ 46

= 5.43% Approximately

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