(Answered) Kern corporation entered into an agreement with its

Finance

Kern Corporation entered into an agreement with its investment banker to sell 10 million shares of the company's stock with Kern netting $210 million dollars from the offering. The expected price to the public was $25 per share. The out-of-pocket expenses incurred by the investment banker were $2,000,000.

a. What profit or loss would the investment banker incur if the issue sold to the public at an average price of $25 per share?

b. What profit or loss would the investment banker incur if the issue were sold to the public at an average price of $20 per share?

c. Is the agreement between the company and its investment banker an example of a negotiated or a best-efforts deal? Why? Which is riskier to the company? Why?

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