Which of the following statements is true regarding underwriting methods? a. In the best efforts method of underwriting, the investment bank buys all the shares from the issuer and then sells the shares to investors at a higher price. b. In the best efforts method of underwriting, the investment bank sells the shares to investors on behalf of the issuer, but the investment bank does not actually buy the shares from the issuer. c. In the best efforts method of underwriting, the offering price is the highest price that will result in all the shares being sold. d. The best efforts method has become the most common method of underwriting in IPOs and SEOs. e. None of the above Which of the following can be accomplished through an IPO? a. An IPO provides the firm with publicly traded shares that can be used as currency in future acquisitions. b. A firm can its leverage through an IPO, thereby obtaining higher tax shields. c. An IPO can enable the firm's original owners to diversify their portfolio. d. A firm with publicly traded equity can raise more equity by conducting an IPO. e. Both a and c Shenanigans, Inc. is planning an IPO, 8 million shares will be issued and the investment bank underwriting the issue will charge a 9% underwriting spread. Other direct expenses will total $2.5 million. The offer price is $24 and the stock is expected to trade at $29 at the close of the offering date. How much money will the investment bank make from this offering? a. $23, 380,000 b. $20, 880,000 c. $19, 780,000 d. $17, 280,000 e. None of the above