Felicity Industries Is Selling 2 Million Shares of Stock in an Auction

question 37

Multiple Choice

Felicity Industries is selling 2 million shares of stock in an auction IPO.At the end of the bidding period they have received the bids shown above.Which of the following is closest to the price at which the shares will be offered?

• A)$5.00
• B)$5.25
• C)$5.75
• D)$6.00

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Definitions:

Intrinsic Value

The perceived or calculated true value of an asset, investment, or company based on fundamental analysis without reference to its market value.

Lower Bound

The minimum value that a mathematical function, financial security, or market variable can have.

Call's Value

Represents the price of an option to buy a particular stock or asset at a set price within a specific time frame.

ESOs

Employee Stock Options; the right granted to employees to buy a set amount of company shares at a fixed price.