Problem:
LaJolla Securitites Inc. specializes in the underwriting of small companies. The terms of a recent offering were as follows:
Number of shares 2 million
Offering Price $25 per share
Net proceeds $45 million
LaJolla Securities expenses, associated with the offering, were $500,000. Determine LaJolla Securities profit on the offering if, immediately after the offering began, the secondary market price of each share was as follows:
a. $23 per share
b. $25 per share
C. $28 per share