An underwriter issues a firm commitment to sell 1 million shares at $20 each, including a $2 spread.How much does the issuing firm receive if only 500,000 shares are sold?
A) $9 million
B) $10 million
C) $18 million
D) $20 million proceeds to firm + (price to public - underwriting spread) x number of shares committed
= ($20 - $2) x 1 million
Correct Answer:
Verified
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