The Very Big Corporation Needs to Net $10,000,000 from the Sale

question 34

Multiple Choice

The Very Big Corporation needs to net $10,000,000 from the sale of common stock.Its investment dealer has informed the firm that the retail price will be $25 per share,and that the firm will receive $22 per share.Out-of-pocket costs are $300,000.How many shares must be sold?

• A) 454,545
• B) 468,182
• C) 412,000
• D) 400,000

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Definitions:

Price-sensitive

Refers to the degree to which the demand for a product or service is affected by changes in its price.

Unitary-elastic

A demand or supply situation where the percentage change in quantity demanded or supplied is exactly equal to the percentage change in price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Profit

The financial gain made by a business when revenue exceeds expenses.