Question: Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beadles Inc., the terms were as follows: The out-of-pocket

Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beadles Inc., the terms were as follows:

Price to public Number of shares Proceeds to Beedles $5 per share

The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $300,000. What profit or loss would Security Brokers incur if the issue were sold to the public at an average price of?

a. $5 per share?

b. $6 per share?

c. $4 per share?

Price to public Number of shares Proceeds to Beedles $5 per share 3 million $14,000,000

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