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.)

Question

Quizplus · Accepted Answer

The amount of funds Crew receives can be calculated as follows:
Shares Sold = 2,500,000 x (34.50/35) = 2,457,143
Total commission charged by the banker = 2,457,143 x 0.0345 = $84,693.75
Total amount received by Crew = Shares Sold x Offer Price - Total Commission
= 2,457,143 x 35 - 84,693.75
= $86,163,756.43
Therefore, the correct answer is (C) $86,163,750.

An Investment Banker Agrees to a Best Efforts Offering of 2.5