Question

0/1 Question 5 View Policies Show Attempt History Current Attempt in Progress * Your answer is incorrect. most Deere and Bros. is a broker that brings new issues of small firms to the public market. Its Vista, Inc., had the following characteristics: Number of shares: 1,400,000 Proceeds to Carla Vista: $13,900,000 Price to public: $19 per share The legal fees were $ 155,000, printing costs were $57,500, and all the other expenses were $71,000. What is the profit or loss for Deere and Bros.? Profit/(Loss) $ 10421000 eTextbook and Media Attempts: 2 of 3 used Save for Later Submit Answer

Answer 1

$\dpi{100} \textup{Total Amount to Broker = Public issue Price per share*No. of share issued - Proceeds to Issuing firm}$

thus,

$\dpi{100} \textup{Total Amount to Broker = 19*1,400,000 - 13,900,000}$

$\dpi{100} \textup{Total Amount to Broker = 12,700,000}$

And,

$\dpi{100} \textup{Profit/Loss to Broker = Total Amount to Broker - Expenses}$

$\dpi{100} \textup{Profit/Loss to Broker = 12,700,000 - 155,000 - 57,500 - 71,000}$

$\bg_green \large \textup{Profit/Loss to Broker = \$12,416,500}$

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.