Sea Grove Beach Corporation Is Executing an Initial Public Offering

question 65

Multiple Choice

Sea Grove Beach Corporation is executing an initial public offering with the following characteristics. The company will sell 12 million shares at an offer price of $20 per share, the underwriter will charge a 7 percent underwriting fee, and the shares are expected to sell for $27.50 per share by the end of the first day's trading. Assuming this IPO is executed as expected.
-Refer to Sea Grove Beach Corporation.What is the initial return earned by investors allocated shares in the IPO?

• A) 20.27%
• B) 27.27%
• C) 30.50%
• D) 37.50%

---

Definitions:

General Decision-making Model

A systematic approach to making decisions that involves identifying a problem, generating alternative solutions, evaluating these solutions, and then implementing the chosen solution.

Scanning The Environment

The act of systematically reviewing the competitive, economic, political, and social landscapes to anticipate and react to changes.

Law Of Unintended Consequences

The Law of Unintended Consequences highlights the unpredictable and unintended effects that can result from an action or decision.

Relevant To Managers

Relevant to managers refers to information, trends, skills, or knowledge that is directly applicable or crucial for managing organizations, making decisions, and leading teams effectively.