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underwriting spread

Definition

Difference between price at which an issue of bonds or shares is offered to the public (public offering price) by the issue's underwriters and the price at which they purchased it from its issuer. The range of this spread can be very wide—from less than one percent on a bond issue of a blue-chip firm to 25 percent or more for the ordinary shares (common stock) of a startup firm making its initial public offering (IPO).

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