Berkley Corp Just Sold 2

question 72

Multiple Choice

Berkley Corp just sold 2.7 million shares through an IPO offering. The shares were offered at $11.75 a share and all shares were sold. The firm received a total of $33,300,000 for this issue. What was the spread?

• A)4.96%
• B)5.50%
• C)6.40%
• D)7.00%
• E)7.12%

---

Definitions:

Annual Return

Refers to the percentage change in an investment's value over a one-year period, including dividends and interest.

Market Rate

The current price or cost of goods, services, or financial assets in a competitive marketplace, often subject to fluctuations.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment, accounting for the time value of money.

Payback

A capital budgeting method that calculates the time needed to recoup the cost of an investment, based on its expected cash flows.