Parafoil Avionics Sells 50 Million Shares of Stock in an SEO

question 47

Multiple Choice

Parafoil Avionics sells 50 million shares of stock in an SEO 40 million being primary shares issued by the company and 10 million being secondary shares sold by investors in the company.At the time of the sale,Parafoil's stock was selling at $12.50 per share.If the underwriter charges 5% of the gross proceeds as a fee,how much money was raised in the sale?

• A)$475 million
• B)$500 million
• C)$594 million
• D)$625 million

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Definitions:

Assets

Resources owned or controlled by a business or an individual that are expected to produce positive economic value.

Liabilities

Financial obligations or debts owed by a business to others that must be settled over time through the transfer of economic benefits.

Measurement Principle

An accounting principle that determines the specific basis on which economic events are recognized and quantified.

Monetary Unit Assumption

An accounting principle that assumes transactions and events can be expressed in stable units of money, facilitating their comparison and measurement.