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8) Using the information provided in problem 7, assume that the underwriter is granted a...

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8) Using the information provided in problem 7, assume that the underwriter is granted a 15% overallotment option. The underwriter issues shares backed by the entire overallotment option but has not yet exercised the option. Based on the information above, please answer the following questions: a) Explain what will happen if the stock price increases to $30 a share. Describe the underwriter's profits in your answer. b) Explain what will happen if the stock price falls to $15 a share. Describe the 4underwriter's profits in your answer. 8) Using the information provided in problem 7, assume that the underwriter is granted a 15% overallotment option. The underwriter issues shares backed by the entire overallotment option but has not yet exercised the option. Based on the information above, please answer the following questions: a) Explain what will happen if the stock price increases to $30 a share. Describe the underwriter's profits in your answer. b) Explain what will happen if the stock price falls to $15 a share. Describe the 4underwriter's profits in your

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