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kobusy [5.1K]
3 years ago
9

An investment banker agrees to underwrite an issue of 10 million shares of stock for TWResearch, Inc. on a firm commitment basis

. The investment banker pays $10.50 per share to TWResearch, Inc. for the 10 million shares of stock. It then sells those shares to the public for $11.20 per share.
If the investment bank can sell the shares for $9.75 per share, what is the profit (loss) to the investment banker?
a) Profit of $1,000,000.
b) Loss of $7,500,000.
c) Profit of $7,000,000.
d) Loss of $7,000,000.\
e) Loss of $1,000,000.
Business
1 answer:
tatuchka [14]3 years ago
4 0

Answer: b) Loss of $7,500,000.

Explanation:

The total the investment bank paid when underwriting was:

= 10.50 * 10,000,000 shares

= $105,000,000

The total they then sell to the public is:

= 9.75 * 10,000,000

= $97,500,000

The profit is:

= Selling revenue from public - Buying cost from company

= 97,500,000 - 105,000,000

= -$7,500,000

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Answer:

1. Increasing

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Explanation:

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A Government budget deficit is acquired when the government spends more than it earns. The Government earns money from taxes and if it spends more than it receives in taxes, that will lead to a deficit. If taxes on Private spending are reduced, this will lead to less tax revenue for the government thereby increasing the Deficit.

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Also how much does investment change by due to interest rates. This will be important to note in terms of Private Investment to see if it will be beneficial to use it over reducing the government budget deficit given a certain interest rate.

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Suppose that an American-made pair of blue jeans has a price of $80. If the exchange rate is $0.095 = 1 peso, then a Mexican con
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Answer:

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Answer:

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