The Do Drop Inn Requires $1

question 217

Multiple Choice

The Do Drop Inn requires $1.5 million to expand its dining room and catering services. The firm's underwriters require a 7.5 percent spread and have set the stock price at $38 a share. The
Estimated issue costs are $145,000. How many shares of stock will Do Drop need to sell if it has a
firm commitment underwriting?

• A) 46,490 shares
• B) 46,800 shares
• C) 46,920 shares
• D) 47,100 shares
• E) 47,400 shares

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