An Underwriter Issues a Firm Commitment to Sell 1 Million

question 49

Multiple Choice

An underwriter issues a firm commitment to sell 1 million shares at $20 each, including a $2 spread.How much does the issuing firm receive if only 500,000 shares are sold?

• A)$9 million
• B)$10 million
• C)$18 million
• D)$20 million proceeds to firm + (price to public - underwriting spread) x number of shares committed
• = ($20 - $2) x 1 million

---

Definitions:

Social Anxiety Disorder

A chronic mental health condition characterized by significant anxiety and fear of being judged, negatively evaluated, or rejected in a social or performance situation.

Animal-type Phobia

A specific type of anxiety disorder characterized by an intense, irrational fear of animals.

Behavioral Theory

A theory that explains human actions in terms of learned behaviors through interactions with the environment.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.