An Investment Banker Agrees to Underwrite an Issue of 5

question 52

Multiple Choice

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.

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Definitions:

Maslow Hierarchy

A theory in psychology proposed by Abraham Maslow, categorizing human needs into a five-tier model, from basic (physiological) to higher needs (self-actualization).

Level Of Needs

A concept reflecting the prioritization of necessities, usually related to Maslow's hierarchy of needs in psychology.

Physiological

Refers to the functions and activities of living organisms and their parts, including all physical and chemical processes.