LaJolla Securities Inc. specializes in the underwriting of small companies. The terms of a recent offering were as follows:
Number of shares ......... 2 million
Offering price ........... $25 per share
Net proceeds ............. $45 million
LaJolla Securities’ expenses associated with the offering were $500,000. Determine LaJolla Securities’ profit on the offering if the secondary market price of the shares immediately after the offering began were as follows:
a. $23 per share
b. $25 per share
c. $28 per share