Reliant Underwriters Has Agreed to a Firm Commitment Underwriting in Which

Multiple Choice

Reliant Underwriters has agreed to a firm commitment underwriting in which they will pay $36.75 million in exchange for 3 million shares of stock for an IPO offering. The offering price is expected to be $13.50 a share. How much will the underwriters earn if all of the shares can be sold?

A) $1.25 million
B) $2.75 million
C) $3.75 million
D) $4.25 million
E) $4.50 million