Question
In: Finance
Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of...
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 $400,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price?
- $5 per share? Use minus sign to enter loss, if any.
$ - $7 per share? Use minus sign to enter loss, if any.
$ - $3.5 per share? Use minus sign to enter loss, if any.
$
Solutions
Expert Solution
answer 1
Share price at which shares sold = $5
number of shares = 3000000
Proceeds to underwriter = number of shares * sale price of shares
=3000000*5
=$15,000,000.00
Proceeds paid to Beedles = 14000000
out of pocket expenses = 400000
Net profit or loss = Proceeds to underwriting firm - proceeds paid to Beedles - out of pocket expenes
=15000000-14000000-400000
=$600,000.00
net profit to firm is $600,000.00
answer 2
Share price at which shares sold = $7
number of shares = 3000000
Proceeds to underwriter = number of shares * sale price of shares
=3000000*7
=$21,000,000.00
Proceeds paid to Beedles = 14000000
out of pocket expenses = 400000
Net profit or loss = Proceeds to underwriting firm - proceeds paid to Beedles - out of pocket expenes
=21000000-14000000-400000
=$$6,600,000.00
net profit to firm is $6,600,000.00
answer 3
Share price at which shares sold = $3.5
number of shares = 3000000
Proceeds to underwriter = number of shares * sale price of shares
=3000000*3.5
=$10,500,000.00
Proceeds paid to Beedles = 14000000
out of pocket expenses = 400000
Net profit or loss = Proceeds to underwriting firm - proceeds paid to Beedles - out of pocket expenes
=10500000-14000000-400000
=-$3,900,000.00
net profit or loss to firm is -$3,900,000.00 or loss of 3900000
jeff jeffy answered 1 year agoRelated Solutions
Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows:
Problem 18-01Profit or Loss on New Stock IssueSecurity 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 shareNumber of shares:3 millionProceeds to Beedles:$14,000,000The out-of-pocket expenses incurred by Security Brokers in the
design and distribution of the issue were $420,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public at the following average price?$4.5 per share? Use minus...
Problem 18-01 Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent...
Problem 18-01
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 $280,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public at the following average price?
$5 per...
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 $500,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public at the...
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 $500,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public at the...
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 $470,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public at the...
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...
Problem 18-01 Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new...
Problem 18-01
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 $370,000. What profit or
loss would Security Brokers incur if the issue were sold to the
public...
Problem 18-01 Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new...
Problem 18-01 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
$240,000. What profit or loss would Security Brokers incur if the
issue were sold to the public...
18-1 Beedles Inc. needed to raise $14 million in an IPO and chose Security Brokers Inc....
18-1 Beedles Inc. needed to raise $14 million in an IPO and
chose Security Brokers Inc. to underwrite the offering. The
agreement stated that Security Brokers would sell 3 million shares
to the public and provide $14 million in net proceeds to Beedles.
The out-of-pocket expenses incurred by Security Brokers in the
design and distribution of the issue were $300,000. What profit or
loss did Security Brokers incur if the issue were sold to the
public at the following average...
1) Security & E-Business List 5 different types of security issues that may confront a Small...
1) Security & E-Business
List 5 different types of security issues that may confront a
Small Business Enterprises (not all are internet based). Discuss
some proactive security solutions.
Include an actual example.
Explain the recent legislation change in regards to hacking of
SBE’s that meet specific conditions.
2) Budgeting for Labour Commitments
List and discuss some of the employee and payroll issues that
may challenge a SBE. Select an actual example for one of these
issues and discuss it in...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Can you explain to me the differnces in how we paid for the health care (access...
- Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure...
- Write a java code that could be used to show the simulation of a tornado. use...
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
- JAVASCRIPT: Please create an array of student names and another array of student grades. - Create...
ADVERTISEMENT