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Question
An investment banker agrees to underwrite an issue of 5 million shares of stock for NetChoice, Inc. on a best-efforts basis. The investment banker is able to sell 4.5 million shares for $31.00 per share and it charges NetChoice, Inc. $0.375 per share sold.
What is the profit to the investment banker if it is able to sell 4.5 million shares for $31 per share?
A. Profit of $1,875,000.
B. Loss of $1,275,000.
C. Profit of $1,687,500.
D. Loss of $3,125,000.
E. Profit of $3,125,500.
Answer
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