In a public offering of $1 par value stock for $9 per share, the underwriting spread is $1. what is the increase to the issuer’s net worth?


  1. The underwriter is selling the to the general public for $9 per share. The underwriter keeps a $1 spread for each share sold. The remaining $8 from each share is paid to the issuer.

    What are shares?

    Shares are equity ownership units in a corporation. Shares occur as a financial asset for some companies, supplying for an equal share of every residual profits, when any are declared, as in form of dividends.
    Some key features regarding the shares are-
    • Shareholders of both a stock that does not pay dividends are not entitled to a profit distribution.
    • Instead, they expect to profit from the rise as in stock price as the company’s profits rise.
    • Shares represent a company’s equity stock, and there are two types of shares: common shares & preferred shares.
    • As a result, the terms “shares” & “stock” are frequently used interchangeably.
    • Most businesses have shares, but only publicly traded companies’ shares are traded on stock exchanges.
    To know more about the shares, here


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