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%

---

Definitions:

Affordable Care Act

A comprehensive health care reform law enacted in March 2010, aimed at expanding health insurance coverage and reducing health care costs.

Essential Health Benefit

A set of health care service categories that must be covered by certain plans under the Affordable Care Act, including emergency services, hospitalization, and maternity care.

SUD Treatment

Interventions and strategies aimed at helping individuals overcome Substance Use Disorders, incorporating medical, therapeutic, and supportive approaches.

TC Treatment Philosophy

The therapeutic community treatment philosophy, which emphasizes mutual self-help, social integration, and long-term rehabilitation for substance abuse.