He wrigley corporation needs to raise $27 million. the investment banking firm of tinkers, evers, & chance will handle the transaction.

a.
if stock is utilized, 1,600,000 shares will be sold to the public at $20.55 per share. the corporation will receive a net price of $17.00 per share. what is the percentage underwriting spread per share? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

underwriting spread per share %

b.
if bonds are utilized, slightly over 27,200 bonds will be sold to the public at $1,003 per bond. the corporation will receive a net price of $998 per bond. what is the percentage of underwriting spread per bond? (relate the dollar spread to the public price.) (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

underwriting spread per bond %

c-1.
which alternative has the larger percentage of spread?

stock
bond

c-2.
is this the normal relationship between the two types of issues?

yes
no