Plasti-Tech Inc

question 64

Multiple Choice

Plasti-tech Inc.has decided to go public and has sold 2 million of its shares to its underwriter for $20 per share.The underwriter then sold them to the public for $22 each.Plasti-tech also encountered $0.5 million in administrative fees.Soon after the issue,the stock price rose to $25.Find Plasti-tech Inc.'s total cost of this issue including any underpricing.

• A) $4.5 million
• B) $9.5 million
• C) $10.5 million
• D) $14.5 million

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Definitions:

Ratio Schedules

A type of operant conditioning reinforcement schedule in which a response is reinforced after a specified number of responses.

Low Reward

A concept in psychology and behavior analysis indicating a minimal positive incentive or payoff for a certain action or behavior, often leading to lower motivation to pursue that action.

High Reward

A significant incentive or outcome that encourages the continuation or repetition of a behavior.

Positive Contrast Effect

The phenomenon where the perceived value or intensity of a stimulus is increased when juxtaposed with a less attractive stimulus.