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The Peter Corp. and the Sellers Company have both announced IPOs. You place an order for 1,000 shares of each IPO. One of the IPOs is underpriced by $14.25 and the other is overpriced by $7.00. If you could get all of the shares you ordered for each IPO, what would your profit be?

a.10,350.00
b.7,350.00
c.3,987.50
d.4,350.00
e.3,625.00

Respuesta :

Answer:

$7250

Explanation:

Given:

Total number of share placed = 1,000

Under-price amount per share = $14.25

Over-price amount per share = $7

Note: Under-price will give benefit in face value and Over-price will get loss.

Computation of total profit:

Profit = (Number of share × Under-price amount per share) - (Number of share     × Over-price amount per share )

Profit = (1000 × $14.25) - (1000 × $7)

Profit = $14,250 - $7,000

Profit = $7,250

Share options refer to a privilege to buy a fixed number of shares for a fixed price. If getting all the share options that applied for IPO, the profit comes out to be $7,250.

What do you mean by IPO?

Initial public offerings mean the offering of shares to the public by any private company for the new issuance of stock.

The profit is $7,250.

Learn more about IPO here:

https://brainly.com/question/14299897

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