Assume Sybase Software is thinking about three different siz

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

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.)
  

Size of the offer Underwriting Spread

a. $ 1.3 million _________________

b. $ 11 million _________________

$ 32 million _________________

Size of Offer	Public Price	Net to Corporation
a.	$	1.3	million		$	45			$	41.60
b.		11.0	million			45				42.48
c.		32.0	million			45				43.50

Solution

Issue size

Underwriter spread in %

1.3 million

7.56%

11 million

5.60%

32 million

3.33%

Working:

Issue size

Public price

Number of shares

Net to corporation per share

Net to corporation in value

Underwriter spread

Underwriter spread in %

I

P

N = I/P

C

V = N x C

S = I-V

S% = S/I

          1,300,000

45

28888.89

41.60

                        1,201,777.78

                  98,222.22

7.56%

        11,000,000

45

244444.44

42.48

                       10,384,000.00

                616,000.00

5.60%

        32,000,000

45

711111.11

43.50

                       30,933,333.33

            1,066,666.67

3.33%

Issue size	Underwriter spread in %
1.3 million	7.56%
11 million	5.60%
32 million	3.33%