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

---

Definitions:

Reference

This term describes the act of mentioning or alluding to something, or the relationship between expressions and entities in the world.

Restrictive

Limiting or controlling access, movement, or growth, often through rules, conditions, or physical barriers.

Nonrestrictive

Describes an element in a sentence, usually a clause or phrase, that provides additional information without limiting or defining the element it modifies.

Restrictive Clause

A part of a sentence that serves to limit or specify the meaning of the noun it modifies and is essential to the sentence's meaning.