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