Phil and Terry Started a New Business Three Years Ago

question 4

Multiple Choice

Phil and Terry started a new business three years ago. Two years ago, they incorporated the business and issued themselves each 20,000 shares of stock. Last year, they took the company public in an initial public offering (IPO) and issued an additional 100,000 shares of stock at that time. The offer price was $14 a share, the spread was 8 percent, and the lockup period was six months. The stock closed at $17 a share at the end of the first day of trading. During the first six months of trading, the stock had a price range of $13 to $23 per share. During the second six months of trading, the stock sold between $15 and $21 per share. Both Tracie and Amy purchased 100 shares at the offer price. Given this, which one of the following statements is correct? Ignore trading costs and taxes.

• A) Tracie could have earned a maximum profit of 100($23 - 17) on her investment.
• B) Phil could have sold 5,000 shares at $23 per share.
• C) The underwriters earned a spread equal to 8 percent of $17.
• D) The maximum price at which Terry could have sold shares is $21.
• E) Amy paid 108 percent of $14 per share to purchase her 100 shares.

Understand the classifications of research by risk level and the requirements for exempt research.

Learn about the protections against scientific fraud, including replication and careful documentation.

Recognize the impact of ethical research practices on participants' safety and psychological welfare.

Understand the critique of animal research from animal rights groups and the ethical justification for such research.

---

Definitions:

Knowledgeable

Possessing or showing understanding or information about a particular subject or field.

Formal Research

A structured process of investigating issues or questions to gain new knowledge, using systematic methods to collect and analyze data.

Routine Business Messages

Routine business messages refer to standard or everyday communications within a business environment, often dealing with operational or administrative matters.

Stylistic Emphasis

The use of specific stylistic elements to highlight or draw attention to important parts of a text or presentation.