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Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues by...

Profit or Loss on New

Stock Issue Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows:

Price to public: $5 per share

Number of shares: 3 million

Proceeds to Beedles: $14,000,000

The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $290,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price?

A. $4.75 per share? Use minus sign to enter loss, if any.

$____

B. $6.50 per share? Use minus sign to enter loss, if any.

$____

C. $4.25 per share? Use minus sign to enter loss, if any.

$____

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jeff jeffy answered 6 months ago
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