Solution-What profit or loss would security brokers incur

What profit or loss would security brokers incur if the

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Reference no: EM13483590

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 $300,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price?

a. $5 per share

b. $6 per share

c. $4 per share

Underwriters" compensation will be 5% of the issue price, so Beranek will net $20.90 per share. The firm will also incur expenses in the amount of $150,000. How many shares must the firm sell to net $20 million after underwriting and flotation expenses?

Reference no: EM13483590

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What profit or loss would security brokers incur if the

Reference no: EM13483590

Reference no: EM13483590

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