Hughes Technology Corp

question 67

Multiple Choice

Hughes Technology Corp. recently went public with an initial public offering in which they received a total of $42 million in new capital funding. The underwriter used a firm commitment offering in which the offer price was $22 and the underwriter's spread was $0.85. Hughes Technology also paid legal and other administrative costs of $825,000 for the IPO. Calculate the number of shares issued through this IPO.

• A) 2,024,823
• B) 3,125,000
• C) 3,328,864
• D) 4,002,179

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Definitions:

Direct Labor-Hours

The total time worked by employees who are directly involved in the manufacturing process of a product.

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or services, based on a preselected activity base.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor expenses.

Machine-Hours

The total number of hours that machinery is operating during a certain period, often used as a basis for allocating manufacturing overhead.