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Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues by small...

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Finance

Profit or Loss on New

Stock Issue Security Brokers Inc. specializes in underwritingnew 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 thedesign and distribution of the issue were $290,000. What profit orloss would Security Brokers incur if the issue were sold to thepublic at the following average price?

A. $4.75 per share? Use minus sign to enter loss, if any.

$____

B. $6.50 per share? Use minus sign to enter loss, if any.

$____

C. $4.25 per share? Use minus sign to enter loss, if any.

$____

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