Consider the Following Information About an IPO Underwriting Transaction

question 10

Multiple Choice

Consider the following information about an IPO underwriting transaction.The net proceeds to the issuing firm are $141.75 million.The public offering price is $50 per share.The spread is $2.75 per share.Two million shares are sold.How many shares are issued in this IPO?

• A)3,500,000
• B)3,000,000
• C)2,500,000
• D)2,000,000

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Definitions:

Frequency Theory

A theory in the study of hearing which suggests that the perception of pitch depends on the rate at which auditory nerve fibers are stimulated by the sound wave.

Pitch Perception

The aspect of hearing that allows the differentiation of sounds based on the frequency of their vibrations, discerning high sounds from low sounds.

Debate

A formal or informal discussion or argument involving opposing viewpoints on a particular topic or issue.

Overview

A general summary or review of a subject, encompassing the main points, principles, or elements.