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22 July, 23:57

XYZ, Inc. has issued 12 million new shares of stock. An investment bank agrees to underwrite these shares on a best efforts basis. The investment bank is able to sell 9.6 million shares for $22 per share, and it charges XYZ $0.710 per share sold. How much money does XYZ receive?

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  1. 23 July, 00:59
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    Answer: $204.384 million

    Explanation:

    To calculate how much XYZ received we will adjust the selling price for the commission fee and then multiply it by the total amount sold.

    XYZ is charged 0.710 per share so,

    = 22 - 0.710

    = $21.29 is the net amount XYZ receives per share.

    Total amount XYZ receives will then be,

    = 21.29 * 9.6 million

    = $204.384 million.

    XYZ receives $204.384 million.
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