Moore investments enters into a best-efforts arrangement to sell 10M shares of stock at $18 per share for Daycare Inc. More incurs expenses of $1M in floating the issue and Daycare incurs expenses of $850K. Moore will receive 10% of the proceeds of the offering. If the offering yields only 5M shares sold at $10 per share, which is true:

Moore suffers a loss of $117M

Daycare incurs a cost of $5.85M

Moore earns a profit of $4M

Moore could have reduced its business risk had it chosen to underwrite the issue