The Whistling Straits Corporation needs to raise $45 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $25 per share and the company's underwriters charge an 11 percent spread. If the SEC filing fee and associated administrative expenses of the offering are $1,890,000, how many shares need to be sold?

Multiple Choice

• 2,191,712

• 2,022,472

• 1,875,600

• 1,689,730

• 2,107,416

The Woods Co. and the Spieth Co. have both announced IPOs at $43 per share. One of these is undervalued by $16, and the other is overvalued by $8, but you have no way of knowing which is which. You plan to buy 1,000 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. Assume you could get 1,000 shares in Woods and 1,000 shares in Spieth.

What would your profit be?