The Wrigley Corporation needs to raise $29 million. The investment banking firm of Tinkers, Evers & Chance will handle the transaction. Required:
a. If stock is utilized, 1,800,000 shares will be sold to the public at $16.50 per share. The corporation will receive a net price of $16.00 per share. What is the percentage underwriting spread per share?
b. If bonds are utilized, slightly over 28,800 bonds will be sold to the public at $1,008 per bond. The corporation will receive a net price of $996 per bond. What is the percentage of underwriting spread per bond?
c. Which alternative has the larger percentage of spread?
d. Is this the normal relationship between the two types of issues?

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?