With a Firm Commitment Underwriting,an Investment Bank Agrees to Sell

question 26

Multiple Choice

With a firm commitment underwriting,an investment bank agrees to sell 2 million shares to the public at $10 per share with a spread of $1.How much does the issuing company receive if only 1.5 million shares are sold?

• A)$20.0 million
• B)$18.0 million
• C)$15.0 million
• D)$13.5 million

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Definitions:

Reflexive Nature

Characteristic of an action or process taking place automatically as a reaction to a stimulus, without conscious thought.

Pupil

The adjustable opening in the center of the eye through which light enters.

Optic Axes

Imaginary lines that pass through the optical center of a lens or optical system, indicating the direction along which light travels through the system.

Retinae

The plural form of retina, which are the light-sensitive layers of tissue at the back of the eyes that convert light into neural signals for vision.