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aalyn [17]
3 years ago
9

In a "firm commitment," the investment banker a. Buys the stock from the company and resells the issue to the public. b. Agrees

to help the firm sell the stock at a favorable price. c. Finds the best marketing arrangement for the investment-banking firm. d. Agrees to help the firm sell the stock at a favorable price and finds the best marketing arrangement for the investment-banking firm.
Business
1 answer:
madam [21]3 years ago
3 0

Answer:

The correct answer is letter "A": Buys the stock from the company and resells the issue to the public.

Explanation:

A "Firm Commitment" or "Bought Deal" is an agreement by which an underwriter assumes all responsibilities for the purchase of securities in an Initial Public Offering (IPO). The underwriter becomes the dealer of those securities and is fully responsible if some securities remain unsold.

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Some large hardware stores such as home depot boast of carrying as many as 20,000 different products in each store. this volume
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A financial advisor offers you two investment opportunities. Both offer a rate of return of 11%. Investment A promises to pay yo
dsp73

Answer:

The value of x is 566.36

Explanation:

The value of x should be such that the present value of both Investments is the same when discounted at a rate of 11%. To calculate the present value, we use the following formula,

Present Value = CF 1 / (1+r)  +  CF 2 / (1+r)^2 + ... + CFn / (1+r)^n

Where,

  • CF represents Cash flow
  • r represents the discount rate

So, we equate both the present value of Investment A and B to calculate the value of x.

Present Value of A = Present Value of B

450/(1.11)  +  650/(1.11)^2  +  850/(1.11)^3 = 850/(1.11)  +  x/(1.11)^2  +  450/(1.11)^3

1554.472661  =  765.7657658  +  x/(1.11)^2  +  329.0361216

1554.472661  -  765.7657658  -  329.0361216  =  x/(1.11)^2

459.6707736 * (1.11)^2  =  x

x = 566.3603602 rounded off to 566.36

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