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A bank specializes in underwriting new issues by small firms. On a recent offering of another company, the terms were as follows:

Price to public: $2 per share

Number of shares: 3 million

Proceeds to the other company: $4,000,000

The out-of-pocket expenses incurred by the bank in the design and distribution of the issue were $500,000. What profit or loss would the bank incur if the issue were sold to the public at these terms?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92359650

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