Use the Following Information to Answer the Question(s) Below

question 12

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil has 8 million shares outstanding and is about to issue 10 million new shares in an IPO. The IPO price has been set at $15 per share, and the underwriting spread is 6%. The IPO is a big success with investors, and the share price rises to $35 the first day of trading.
-The amount that Wyatt Oil pays as an underwriting spread closest to:

• A) $6 million
• B) $7 million
• C) $9 million
• D) $17 million
• E) $21 million