$$\begin{array} { c c c }
\hline \text { Bidder } & \text { Bid per share } & \text { Shares } \
\hline \text { A } & \$ 50 & 5,000 \
\text { B } & \$ 45 & 10,000 \
\text { C } & \$ 40 & 40,000 \
\text { D } & \$ 40 & 25,000 \
\text { E } & \$ 35 & 10,000 \
\text { F } & \$ 30 & 15,000 \
\text { G } & \$ 20 & 35,000 \
\hline
\end{array}$$ TABLE 15.3
-Suppose that Magnum Opus Corporation announces that it intends to go public by offering 100,000 shares using a multiple-item Dutch auction. Table 15.3 summarizes the offer price and number of shares of each bidder. If the objective of the auction is to maximize sales revenues, the seller's reservation price is:
A) $50
B) $45
C) $35
D) $25
E) None of the above.

Question

$$\begin{array} { c c c } 
\hline \text { Bidder } & \text { Bid per share } & \text { Shares } \
\hline \text { A } & \$ 50 & 5,000 \
\text { B } & \$ 45 & 10,000 \
\text { C } & \$ 40 & 40,000 \
\text { D } & \$ 40 & 25,000 \
\text { E } & \$ 35 & 10,000 \
\text { F } & \$ 30 & 15,000 \
\text { G } & \$ 20 & 35,000 \
\hline
\end{array}$$ TABLE 15.3
-Suppose that Magnum Opus Corporation announces that it intends to go public by offering 100,000 shares using a multiple-item Dutch auction. Table 15.3 summarizes the offer price and number of shares of each bidder. If the objective of the auction is to maximize sales revenues, the seller's reservation price is:
A) $50
B) $45
C) $35
D) $25
E) None of the above.

Quizplus · Accepted Answer

In a multiple-item Dutch auction, the shares are allocated starting from the highest bid until all shares are sold. To sell 100,000 shares, bids from A, B, C, D, and E are accepted. The lowest accepted bid, which determines the price for all shares, is $35.

TABLE 153 -Suppose That Magnum Opus Corporation Announces That It Intends

TABLE 153
-Suppose That Magnum Opus Corporation Announces That It Intends