Calculating Costs of Issuing Stock Polly's Ponies, Inc

question 91

Multiple Choice

Calculating Costs of Issuing Stock Polly's Ponies, Inc., with the help of its investment bank recently issued 7.5 million shares of new stock. The offer price on the stock was $15.00 per share and Polly's received a total of $105.75 million from the stock offering. Calculate the net proceeds and the underwriter's spread charged by the underwriter to Polly's. What percentage of the gross proceeds is the investment bank charging Polly's for underwriting the stock issue?

• A) 3%
• B) 6%
• C) 9%
• D) 94%

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Definitions:

Endogenous Opioids

Naturally occurring peptides, such as endorphins, produced by the body that act on the nervous system to reduce pain and induce pleasure.

Eating Behaviour

Refers to the patterns, motivations, and factors influencing what, when, and how much an individual eats.

Modulation of Pain

The process by which the perception of pain is adjusted or altered by various factors, such as psychological or physiological interventions.

Body's Response

The way an organism's systems react to internal or external stimuli, which can include physiological changes or behaviors.