In a Recent IPO, the Sausage Co

question 22

Multiple Choice

In a recent IPO, the Sausage Co. offered 1.6 million shares of stock at an offer price of $18 a share. The underwriting was conducted on a best efforts basis with a spread of 7.0 percent. The Sausage Co. received a total of $25,079,868.00 in sale proceeds. How many shares were sold?

• A) 1,378,700 shares
• B) 1,486,500 shares
• C) 1,498,200 shares
• D) 1,505,700 shares
• E) 1,508,400 shares

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Definitions:

Accounts Payable Period

The average amount of time it takes for a business to pay its invoices from suppliers and vendors, typically measured in days.

Cash Expenses

Outflows of cash within a certain period for operational activities, excluding non-cash expenses like depreciation.

Projected Sales

Estimates of the amount of revenue that a company expects to earn in the future.

Credit Sales

Credit sales refer to a transaction wherein the payment for the goods or services provided is made at a later date.