Firm commitment versus best efferts. 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 2.8% of the retail sales or ?(b?) a firm commitment arrangement of ?$9,500,000. Lunar plans on offering shares at ?$12.05 per share to the public.
a. What is the? break-even point in number of shares for Lunar? Vacations?
b. What are the proceeds to Lunar Vacations at the? break-even point?
c. What are the proceeds to Astro Investment Bank at the? break-even point?