the bull bows investment banking firm has proposed two types of payment plans fo

Question

the bull bows investment banking firm has proposed two types of payment plans for the IPO being considered by

Johnson JerryRig, a manufactuerer of an oil drilling equipment. The first firm committment is of $10,000,000.

The second is a best effort in which BB will receive $3.00 for every share sold up to a maximum of $1,200,000

for the 400,000 shares being offered. How much money will BB earn under the firm committment method if it is

only able to sell 90% of the offering of $30.00 per share?

A. $800,000

B. 1,080,000

C. 2,000,000

D1,200,000

Explanation / Answer

B. 1,080,000

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