Amount of the total shareholder cost issues

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An investment banker agrees to underwrite an issue of 10 million shares of stock for TWResearch, Inc. on a firm commitment basis. The investment banker pays $10.50 per share to TWResearch, Inc. for the 10 million shares of stock. It then sells those shares to the public for $11.20 per share.

1. How much money does TWResearch receive?

2. What is the profit (loss) to the investment banker?

3. If the investment bank can sell the shares for $9.75 per share, how much money does TWResearch receive?

4. If the investment bank can sell the shares for $9.75 per share, what is the profit (loss) to the investment banker?

5. An open-ended fund has stocks of three companies: 200 shares of IBM currently valued at $50.00, 100 shares of GE currently values at $20 and 100 shares of Digital currently valued at $30. The fund has 500 shares outstanding. What is the net asset value (NAV) of the fund?

6. An investor invests $100,000 in a mutual fund that has a 5 percent front-end load, charges a management fee of 0.5 percent, and a 12b-1 fee of 0.25 percent. The investor plans to leave the investment for one year. What is the dollar amount of the total shareholder cost?

Reference no: EM13806597

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