Financial spread
Financial spread (or, simply, spread) is the difference between the price at which an underwriter sells the stock in an initial public offering and the proceeds that the underwriter passes on to the issuing firm; the fee collected by the underwriter. It is often about 7% of the offering price.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Spread. The difference between the price at which an underwriter sells the stock in an initial public offering and the proceeds that the underwriter passes on to the issuing firm; the fee collected by the underwriter. It is often about 7% of the offering price.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
