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Charlesworth Investment Bankers (CIB) are in the business of managing the process of going through an independent public offering. The typical offering is in the total value range of $10 million to $20 million on a firm commitment basis. A new corporation, Mega New Corp, who approached them has spent the last 2 years growing a very profitable venture. They plan to issue 5 million shares at $15 per share, giving them $75 million in total issuance of shares in order to expand into the European market, where they would have very little competition. Which of the following courses of action are likely to be taken by CIB? Steps A and B. Steps A, B, and C. C. Because of the size of the issue, encourage the use of the best efforts basis underwriting to reduce the risk to CIB. B. Perform due diligence with regard to Mega New Corp, their products, their management team, and the existing shareholders, to ensure there are no surprises in doing the issue. A. Contact other investment bankers to form an underwriting syndicate to share the risk of this issue. Steps B and C. Charlesworth Investment Bankers (CIB) are in the business of managing the process of going through an independent public offering. The typical offering is in the total value range of $10 million to $20 million on a firm commitment basis. A new corporation, Mega New Corp, who approached them has spent the last 2 years growing a very profitable venture. They plan to issue 5 million shares at $15 per share, giving them $75 million in total issuance of shares in order to expand into the European market, where they would have very little competition. Which of the following courses of action are likely to be taken by CIB? Steps A and B. Steps A, B, and C. C. Because of the size of the issue, encourage the use of the best efforts basis underwriting to reduce the risk to CIB. B. Perform due diligence with regard to Mega New Corp, their products, their management team, and the existing shareholders, to ensure there are no surprises in doing the issue. A. Contact other investment bankers to form an underwriting syndicate to share the risk of this issue. Steps B and C

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