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Calculate the profit or loss for the investment banker

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Reference no: EM13318549

Taylor Corporation wants to raise $40 million. Its stock price is now $25 per share. The new issue will be priced at $23 per share. The company will incur expenses of $1 million. The underwriters' compensation will be 8% of the issue price and the underwriter will incur expenses of $1.2 million.

a. How many shares of stock must be sold for the company to net $40 million after costs and expenses?
b. Calculate the profit or loss for the investment banker?

Reference no: EM13318549

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