Consider the following information about an IPO. 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

Question

Quizplus · Accepted Answer

The net proceeds are calculated as the number of shares issued times the offering price minus the spread. Solving for the number of shares: $141.75 million = (Number of shares) * ($50 - $2.75). This gives 3,000,000 shares.

Consider the Following Information About an IPO