Astro Investment Bank offers Lunar Vacations the following options on its initial public sale of equity: (a) a best efforts arrangement whereby Astro will keep 2.4 % of the retail sales or (b) a firm commitment arrangement of $10 comma 200 comma 000. Lunar plans on offering 1 comma 000 comma 000 shares at $12.09 per share to the public. If it sells 100 % of the shares, which is the better choice for Lunar Vacations? Which is the better choice for Astro Investment Bank?

a) a best efforts arrangement will yield income of $290,160 (2.4% of 1,000,000 x $12.09) to Astro Investment Bank.

b) a firm commitment arrangement of $10,200,000 will yield income of $1,890,000 (1,000,000x $12.09 minus $10,200,000) to Astro Investment Bank.

c) If 100% of the shares are sold, the better choice for Lunar Vacations is under the best efforts arrangement whereby Astro keeps 2.4% of the retail sales.  This amounts to only $290,160.

d) If 100% of the shares are sold, the better choice for Astro Investment Bank is under the firm commitment arrangement because it will earn $1,890,000 from the deal.

Explanation:

Best efforts arrangement is an agreement whereby the underwriting firm undertakes to make best efforts to sell the shares of the issuer without a firm commitment guaranteeing that all the shares will be sold.  This implies that the underwriter does not take liability for unsold issues.

Usually, the underwriter and the issuer agree on a minimum level of shares to be sold.  And once the minimum is reached, the underwriter is not under obligation to guarantee the unsold portion.

On the other hand, a firm commitment arrangement means that the underwriter guarantees to assume liability for any unsold issue.  For this risk, it is usually arranged for the shares to be sold at a spread, which compensates the underwriter for the assumed risk.  For example, an issue at a price of $10 per share can assume a spread of 10%.  The implication is that the issuer will receive 10% less per share.  For this example, it will be ready to receive $9 per share as against the $10 per share issue price.

answer: a. the kind of population living in your neighbourhood.

the census explorer data tool by the us census bureau allows the user to zoom in on any neighbourhood within the united states and find the kind of people residing in that by race and age.  

the tool needs to needs to be used twice – once in order to find what type of people reside in a neighbourhood, and then to see the age groups of the people in the same neighbourhood.

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.