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

question 51

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.In percentage terms,how much market value is absorbed by the total cost (direct expenses plus underpricing cost) ?

• A) 13.33%
• B) 23.33%
• C) 33.33%
• D) 43.33%

---

Definitions:

For Privacy

Pursued to maintain confidentiality or to create a space where one can be free from the observation or disturbance of others.

Organize Movement

The process of creating and coordinating a collective effort aimed at achieving a specific goal, usually related to social, political, or environmental change.

Positive Affect

A psychological state characterized by feelings of joy, enthusiasm, and satisfaction, often associated with a positive mood.

Introverts

Individuals characterized by a preference for the inner world of thoughts, feelings, and reflections, often displaying less outgoing social behavior.