An Investment Banker Agrees to Underwrite an Issue of 5

question 84

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.
-If the investment bank were able to sell all 5 million shares for $35,how much money would NetChoice,Inc.receive?

• A)$195,675,000.
• B)$187,500,000.
• C)$130,250,000.
• D)$175,000,000.
• E)$173,125,000.

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Definitions:

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in producing a good or service.

Cost Of Capital

The return rate that a company must earn on its investment projects to maintain its market value and attract funds.

Cost Of Labor

The total expense incurred by employers to compensate their workforce, including wages, salaries, benefits, and other related costs.

Slope

In mathematics, the slope is the measure of the steepness or the inclination of a line or a segment of a line connecting two points.