Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues...
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Accounting
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 following average price?
$5.25 per share? Use minus sign to enter loss, if any. $
$6.25 per share? Use minus sign to enter loss, if any. $
$4 per share? Use minus sign to enter loss, if any. $
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