Business, 14.04.2020 18:04, george27212

Your firm is selling 4 million shares in an IPO. You are targeting an offer price of $ 14.82 per share. Your underwriters have proposed a spread of 8.1 %, but you would like to lower it to 6.6 %. However, you are concerned that if you do so, they will argue for a lower offer price. Given the potential savings from a lower spread, how much lower can the offer price go before you would have preferred to pay 8.1 % to get $ 14.82 per share? The offer price would need to drop to $ nothing.

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Your firm is selling 4 million shares in an IPO. You are targeting an offer price of $ 14.82 per sha...