Use the Table for the Question(s)below

question 50

Multiple Choice

Use the table for the question(s) below.
David founds a company and goes through the investment rounds shown below:
He decides to take the company public through an IPO,issuing 2 million new shares.Assuming that he successfully completes the IPO,the net income for the next year is estimated to be $8 million.His banker informs him that the price of shares should be set using average price-earnings ratios for similar businesses,which is 15.0.
-An IPO is offered at $6.75 per share for 2 million shares.The IPO underwriters had a spread of 9%.What was the total fee paid to the underwriters?

• A)$13,500,000
• B)$1,215,000
• C)$12,285,000
• D)$12,385,000
• E)$1,800,000

Understand the basics of behavioral finance and how psychological factors influence investor behavior and market dynamics.

Differentiate between technical analysis and fundamental analysis.

Grasp the concept of risk aversion and how it influences investment decisions.

Compare and contrast conventional finance theory with behavioral finance assumptions about investor rationality.

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