An Investment Banker Agrees to Underwrite an Issue of 5

question 6

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.