Bubba Corporation has a registered public offering of 750,000 shares at $40. An underwriter of 30,000 shares is advised by the manager that its retention will be 70%. How many shares may the underwriter sell to its own customers?
A)30,000
B)21,000
C)9.000
D)as many as it can up to a maximum of 51,000

Question

Quizplus · Accepted Answer

21,000. The underwriter is permitted to retain 70% of the 30,000 shares. The remaining 9,000 shares are kept in the pot by the manager.

Bubba Corporation Has a Registered Public Offering of 750,000 Shares