An investment bank agrees to underwrite an issue of 13 million shares of stock for Looney Landscaping Corporation. a. The investment bank underwrites the stock on a firm commitment basis, and agrees to pay $20.00 per share to Looney Landscaping Corporation for the 13 million shares of stock. The investment bank then sells those shares to the public for $21.00 per share. How much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? If the investment bank can sell the shares for only $18.00, how much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? b. Suppose, instead, that the investment bank agrees to underwrite the 13 million shares on a best efforts basis. The investment bank is able to sell 11.8 million shares for $20.00 per share, and it charges Looney Landscaping Corporation $0.275 per share sold. How much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? If the investment bank can sell the shares for only $18.00, how much money does Looney Landscaping Corporation receive? What is the profit to the investment bank?

Amount received by Looney Landscaping Corp. @ $20.00 per share

Investment bankers profit if shares are sold @ $21.00 per share

Amount received by Looney Landscaping Corp. @ $18.00 per share

Investment bankers profit if shares are sold @ $18.00 per shareb.

Amount received by Looney Landscaping Corp. @ $20.00 per share

Investment bankers profit if shares are sold @ $20.00 per share

Amount received by Looney Landscaping Corp. @ $18.00 per share

Investment bankers profit if shares are sold @ $18.00 per share