An investment banker agrees to underwrite an issue of 10 million shares of stock for XYZ Corp. on a firm commitment basis. The investment banker pays $25.50 per share to XYZ Corp. for the 20 million shares of stock. It then sells those shares to the public for $26.35 per share.

a) How much money does XYZ Corp. receive?

b) What is the profit to the investment banker?

c) if the investment bank can sell the shares for only $24.75 instead of $26.35, how much money does XYZ Corp. receive?

d)What is the profit to the investment banker?