# tb - Use the following information to answer questions 59...

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Use the following information to answer questions 59 to 62. An investment banker agrees to underwrite an issue of 10 million shares of stock for NatDollar Inc. on a firm commitment basis. The investment banker pays \$10.50 per share to NatDollar Inc. for the 10 million shares of stock. It then sells those shares to the public for \$11.20 per share. -How much money does NatDollar Inc. receive? = \$ 105,000,000 -What is the profit (loss) to the investment banker?=Profit of \$7,000,000 -If the investment bank can sell the shares for only \$9.75, how much money does NatDollar Inc. receive? = \$ 105,000,000 -If the investment bank can sell the shares for only \$9.75, what is the profit (loss) to the investment banker? = Loss of \$7,500,000 Use the following information to answer questions 63 to 66. An investment banker agrees to underwrite an issue of 10 million shares of stock for NatDollar Inc. on a best-efforts basis. The investment banker is able to sell 8 million shares for \$10.50 per share, and it charges NatDollar Inc. \$0.225 per share sold.
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## This note was uploaded on 03/12/2012 for the course FINANCE F720 taught by Professor Macinnes during the Spring '08 term at McMaster University.

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