Assume the Issuer Incurs $1 Million in Other Expenses to Sell

question 12

Multiple Choice

Assume the issuer incurs $1 million in other expenses to sell 3 million shares at $40 each to an underwriter and the underwriter sells the shares at $43 each.By the end of the first day's trading,the issuing company's stock price had risen to $70.What is the total cost of issuing the securities?

• A) $81 million
• B) $91 million
• C) $101 million
• D) $111 million

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Definitions:

Negligence

The failure to take reasonable care to prevent harm to others that a reasonably prudent person would have taken under the same circumstances.

Check 21 Act

A U.S. federal law that facilitates check truncation by creating a new type of negotiable instrument called a substitute check.

Electronically

Refers to processes, transactions, or communications that are conducted using electronic devices or over the internet.

Mandatory

Required or obligatory, implying that it must be done or adhered to without choice.