How Much Will a Firm Receive in Net Funding from a Firm

question 33

Multiple Choice

How much will a firm receive in net funding from a firm commitment underwriting of 250,000 shares priced to the public at $40 if a 10% underwriting spread has been added to the price paid by the underwriter? Additionally, the firm pays $600,000 in legal fees.

• A)$8,400,000
• B)$8,460,000
• C)$8,490,000
• D)$8,545,455 Cost to public = $40
• Net to issuer = $40/1.10 = $36.36
• Therefore, the spread was $3.64 per share.

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Definitions:

Primary Afferents

Sensory neurons that convey impulses from the skin to the spinal cord.

Peripheral Nervous System

Part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, involved in connecting the CNS to limbs and organs.

Neurotransmitters

Chemical messengers in the nervous system that transmit signals between neurons or between neurons and muscles.

Sensor Afferents

Nerves that carry sensory signals from the periphery of the body towards the central nervous system.