In a Recent IPO, the Sausage Co

question 60

Multiple Choice

In a recent IPO, the Sausage Co. offered 1.4 million shares of stock at an offer price of $16 a share. The underwriting was conducted on a best efforts basis with a spread of 7.0%. The Sausage Co. received a total of $20,079,868 in sale proceeds. How many shares were sold?

• A)1,349,453 shares
• B)1,486,500 shares
• C)1,498,200 shares
• D)1,505,700 shares
• E)1,508,400 shares

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Definitions:

Private Goods Consumption

Involves the use of goods that are excludable and rivalrous, meaning their consumption by one individual prevents another from consuming the same good.

Pareto Optimal

A condition where the distribution of resources cannot be changed without negatively impacting at least one person.

Private Goods Consumption

The act of consuming goods that are excludable and rivalrous in nature, meaning they can only be owned or consumed by one party and consumption by one person prevents consumption by another.

Pareto Optimal

A state of allocation of resources from which it is impossible to make any one individual better off without making at least one individual worse off.