AbacusCom Has Just Made an Initial Public Offering of Stock

question 36

Multiple Choice

Abacus.com has just made an initial public offering of stock with the help of an investment bank.It sold 5 million shares at a price of $84 each.How much money did the corporation raise through this stock offering?

• A)$420 million
• B)zero,because a firm only acquires funds on the secondary market
• C)$336 million
• D)$420 million minus fees paid to the investment bank
• E)It depends on the interest rate

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Definitions:

Factory Overhead Rate

A calculation used in manufacturing to allocate indirect costs, such as utilities and rent, to individual units of production.

Processing Departments

Divisions or areas within a factory where specific stages of production are completed, often part of a cost accounting system to track expenses and efficiency.

Job Order Costing

An accounting methodology used to allocate costs to specific jobs or batches, allowing for detailed cost tracking of particular projects.

Finished Goods Account

An account used to track the value of products that are completed and ready for sale.