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

question 4

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 (direct expenses plus underpricing cost) ?

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

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Definitions:

Neurotic

A term related to neurosis, referring to a psychological state characterized by excessive anxiety or insecurity, without a break from reality.

Positivist Perspective

A viewpoint in sociology that emphasizes the use of scientific methods to study and understand society and human behavior.

Absolutism

A political theory that holds all power should be vested in one ruler or other authority, with no checks or balances.

Deviant Behavior

Actions or behaviors that violate social norms or expectations, often resulting in negative social judgments.