Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued $

Question

Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued $196.6 million of new debt. The offer price on the debt was $1,000 per bond and the underwriter’s spread was 6 percent of the gross proceeds.

Calculate the amount of capital funding Harper’s Dog Pens raised through this bond issue. (Enter your answer in dollars not in millions.)

Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued $196.6 million of new debt. The offer price on the debt was $1,000 per bond and the underwriter’s spread was 6 percent of the gross proceeds.

Explanation / Answer

underwriter fees = debt amount * underwriter spread

=>$196.6 million * 6%

=>$11.796 million

funds received = debt amount - amount of under writer spread

=>$196.6 million - 11.796 million

=>$184.804 million.

amount of capital funding harpers dog pens raised through this bond issue =$184.804 million.

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