Which of the Following Is Correct If an Underwriter Is

question 69

Multiple Choice

Which of the following is correct if an underwriter is selling stock to the public at $40 per share,the underwriter receives a $3 per share spread,2 million shares are sold,and the issuing firm receives $111 million from the underwriter?

• A) The underwriter's spread was greater than $3.
• B) The issue appreciated in price immediately.
• C) The issue included 3 million shares.
• D) The stock was issued on a best efforts basis.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed for the work performed, multiplied by the standard labor rate.

Standard Hours

The estimated time that should be taken to complete a task or produce a unit under normal conditions.

Actual Labor-Hours

Actual labor-hours represent the real number of labor hours worked by employees, as opposed to planned or estimated hours, often used in productivity and costing analyses.

Direct Material Standards

The anticipated cost and quantity of materials required for the production of goods or services.