Walton and Company is the managing investment banker for a major new underwritin

Question

Walton and Company is the managing investment banker for a major new underwriting. The price of the stock to the investment banker is $19 per share. Other syndicate members may buy the stock for $20.25. The price to the selected dealers group is $21.45, with a price to brokers of $22.32. Finally, the price to the public is $24.50.

(a)

If Walton and Company sells its shares to the dealers group, what will the percentage return be? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Return %

(b)

If Walton and Company also performs the dealer

Explanation / Answer

a. % Return = (Dealer price - Investment Banker price)/Inv Banker price = (21.45-19)/19 = 12.89% b. % return = (Broker price-Dealer price)/delare price = (22.32-21.45)/21.45 = 4.06% c. % Return = (Public price - Inv Banker price)/Inv Banker price = (24.50-19)/19=28.95%

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.