An Underwriter Enters into a Firm Commitment to Sell 1

question 2

Multiple Choice

An underwriter enters into 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