Calculating Costs of Issuing Stock Computer Technology Corp

question 25

Multiple Choice

Calculating Costs of Issuing Stock Computer Technology Corp.recently went public with an initial public offering of 7 million shares of stock.The underwriter used a firm commitment offering in which the net proceeds was $8.35 per share and the underwriter's spread was 7 percent of the gross proceeds.Computer Technology also paid legal and other administrative costs of $300,000 for the IPO.Calculate the gross proceeds per share received by Computer Technology from the sale of the 7 million shares of stock.

• A)$8.35
• B)$8.39
• C)$8.98
• D)$9.02

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Definitions:

Management Rights

The entitlements or prerogatives of management to make decisions regarding the operation of a business and the management of its employees.

Business Unionism

A type of unionism whose mission is to protect workers, increase their pay, improve their working conditions, and help workers in general; it recognizes that a union can survive only if it delivers a needed service to its members in a businesslike manner.

Collective Agreements

Contractual agreements between employers and a group of employees, typically negotiated by unions.

Strike Action

The collective refusal of employees to work, aimed at protesting against employment conditions or bargaining for better terms.