An investment banker agrees to underwrite an issue of 10 million shares of stock for Rochester Industries on a best-efforts basis. The investment banker is able to sell 8 million shares for $10.50 per share, and it charges Rochester Industries $0.225 per share sold.
-What would be the profit to the investment banker it were able to sell all 10 million shares for $12.75 per share?
A) Profit of $2,250,000.
B) Loss of $7,500,000.
C) Profit of $7,500,000.
D) Loss of $3,000,000.
Correct Answer:
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