Question

the bull bows (bb) investment banking firm has proposed two types of payment plans for the ipo that johnson jerryrig, a manufacturer of oil drilling equipment, is considering. the first is a firm commitment of $10,000,000. the second is a best effort in which bb will receive $3.00 for every sold share up to a maximum of $1,200,000 for the 400,000 shares offered. how much money will bb earn under the best efforts method if it is able to sell only 90% of the offering at a price of $30.00 per share?

Answer 1

If BB is only able to sell 90% of the offering at a price of $30.00 a share, it will make $1,080,000 in profit using the best efforts method. Per share sold = 400,000 x 0.90 x $3.00

What Is the Earnings Per Share Calculation Formula?

Taking a company's net income and deducting preferred dividends from it will yield earnings per share. Then divide that sum by the average number of common shares that are currently outstanding.

What constitutes a high earnings per share?

The most successful stocks are those with ratings of 80 or higher. Stock buybacks, which lower the number of outstanding shares, can help businesses increase their EPS figures. Substantial sales growth is thus required for strong profit growth.

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