The 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 $$20\mathrm{.}55$ per share. The corporation will receive a net price of $$17\mathrm{.}00$

per share. What is the percentage underwriting spread per share?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

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.$)$

Note: 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?