Calculating Costs of Issuing Stock Plains Corp

question 62

Multiple Choice

Calculating Costs of Issuing Stock Plains Corp. recently went public with an initial public offering in which they received a total of $25 million in new capital funding. The underwriter used a firm commitment offering in which the offer price was $25 and the underwriter's spread was $1.00. TriState also paid legal and other administrative costs of $800,000 for the IPO. What is the number of shares issued through this IPO?

• A) 1,075,000
• B) 1,041,667
• C) 1,032,000
• D) 1,008,334

---

Definitions:

Liquidity Ratios

Financial ratios that measure a company's ability to meet its short-term obligations, such as current ratio and quick ratio.

Activity Ratios

Financial metrics used to measure a company's ability to convert different accounts within its balance sheets into cash or sales.

Activity Ratios

Metrics that assess the efficiency with which a company utilizes its assets to generate revenue or sales.

Cash Flow

The total amount of money being transferred into and out of a business, specifically measuring its liquidity and financial health over a period.