a. Kern Corporation entered into an agreement with its investment banker to sell 15 million shares of the company's stock with Kern netting $300 million from the offering. The expected price to the public was $25 per share.
b. What profit or loss would the investment banker realize 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?