4-99 What is the profit to the investment banker it sells 4.5 million shares for $29 per share?

Question

Quizplus · Accepted Answer

The investment banker's profit is the difference between the selling price and the cost of the shares. The selling price is $29 per share, and the investment banker sold 4.5 million shares, so the total selling price is $29 * 4.5 million = $130.5 million. The cost of the shares is not given in the question, so we cannot calculate the profit exactly. However, we can say that the profit is at least $1,687,500, because the investment banker would have made a loss if the cost of the shares was more than $29 per share.

4-99 What Is the Profit to the Investment Banker It