The Winston Co

question 13

Multiple Choice

The Winston Co. is considering two mutually exclusive projects with the following cash flows. The crossover rate is _____ and if the required rate is higher than the crossover rate then project _____
Should be accepted.

• A) 13.94 percent; A
• B) 13.94 percent; B
• C) 15.44 percent; A
• D) 15.44 percent; B
• E) 15.86 percent; A

---

Definitions:

Initial Public Offering (IPO)

The first sale of stock by a company to the public, marking the transition from a private entity to a public company.

Gross Spread

The difference between the underwriting expense of a security and the amount received from the selling group.

Offering Price

The price at which new shares are offered to the public by an issuer or by shareholders of the company.