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    quantity discount

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    Assume Fisher Food Products is thinking about 3 different size offerings for the issuance of additional shares

    Size offer Public Price Net to Corporation
    a. 1.6 million $40 $36.70
    b. 6.0 million 40 37.28
    c. 25.0 million 40 38.12

    What is the percentage underwriting spread for each size offer?
    and
    What principle does this demonstrate?

    © BrainMass Inc. brainmass.com October 9, 2019, 7:33 pm ad1c9bdddf
    https://brainmass.com/economics/public-economics/quantity-discount-121519

    Solution Preview

    a) Spread = $40 - $36.70 = $3.30
    Percentage underwriting spread = 3.30/40=8.25%

    b) Spread = ...

    Solution Summary

    A comparison to quantity discount is made.

    $2.19