Please type the answer Spartans Investment House is an under

Spartans Investment House is an underwriting firm specializing in initial public offerings (IPOs). Spartans is hired to underwrite an issue of 7.5 million shares of stock for MyFace, a private social media firm looking to go public. 3.

Solution

b i) No of shares sold = 6.8 million
Share price = 9.5 per share
Commision of 0.257/share
Capital raised by Myface = 6,800,000 * 9.5 - 6,800,000 * 0.257 = 62,852,400
Profit by Underwriter =  6,800,000 * 0.257= 1,747,600

ii) No of shares sold = 6.8 million
Share price = 7.95 per share
Commision of 0.257/share
Capital raised by Myface = 6,800,000 * 7.95 - 6,800,000 * 0.257 = 52,312,400
Profit by Underwriter =  6,800,000 * 0.257= 1,747,600

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