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22 July, 19:46

An investment banker agrees to a best efforts offering of 2.5 million shares of Crew stock. The offer price is set at $35 per share. If the stock is actually sold to the public at $34.50 and the banker charges a 3.45 cent commission per share sold, what is the amount of funds Crew receives? (Ignore any other fees or expenses.)

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  1. 22 July, 23:18
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    Ans. Crew receives $86,163,750

    Explanation:

    Hi, the stock is actually sold to the public at $34.50 and the bankers commision is 3.45 cents/share ($0.0345/share), the revenue per share is $34.50 - $0.0345 = $34.4655.

    Since there are 2,500,000 shares at $34.4655 per share, Crew receives:

    2,500,000*$34.4655 = $86,163,750

    Best of luck.
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