Use the Table for the Question(s)below

question 101

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 $23 per share for 12 million shares.The IPO underwriters had a spread of 6%.What proceeds did the firm receive from the IPO?

• A)$259 million
• B)$276 million
• C)$260 million
• D)$293 million
• E)$270 million

---

Definitions:

Liquidated

A term referring to a debt or obligation that has been determined, settled, or resolved.

Net Assets

The total assets of a company minus its total liabilities, representing the owners' equity in the company.

Distribution Order

An official directive detailing how the assets of a deceased or bankrupt person should be allocated among claimants or heirs.

Termination

The process of bringing an end to something, such as a contractual agreement, employment relationship, or legal obligation.