Assume the Issuer Incurs $1 Million in Other Expenses to Sell

question 4

Multiple Choice

Assume the issuer incurs $1 million in other expenses to sell 3 million shares at $40 each to an underwriter and the underwriter sells the shares at $43 each.By the end of the first day's trading,the issuing company's stock price had risen to $70.What is the total cost (direct expenses plus underpricing cost) ?

• A) $81 million
• B) $91 million
• C) $101 million
• D) $111 million

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Definitions:

Binary Decision

A binary decision is a choice between two alternatives, often represented in computing and mathematical logic as 1 or 0, true or false.

Variable

Each input and output item the program manipulates.

Apple

An American multinational technology company known for its consumer electronics, software, and online services.

Special Symbols

Characters used in computing that are not letters or numerals, including punctuation marks, mathematical symbols, and graphical symbols.