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

question 21

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 on the first day of trading.
-The total cost to the firm's original investors due to the market imperfections from the IPO is closest to:

• A)$141 million.
• B)$210 million.
• C)$280 million.
• D)$489 million.

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Definitions:

Geoffrey Moore

An American organizational theorist, management consultant, and author known for his work on the technology adoption life cycle and marketing strategies for high-tech products.

Chasm

A significant gap or barrier that must be overcome, often used metaphorically in business and technology adoption contexts.

Technology Adoption Life Cycle

A model in sociology which explains how a new product or innovation is adopted or accepted, based on the demographic and psychological traits of specific groups of adopters.

Market Opportunity

The degree of customer or market demand for a specific product application.