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DedPeter [7]
3 years ago
9

Draiman Guitars is offering 110,000 shares of stock in an IPO by a general cash offer. The offer price is $39 per share and the

underwriter's spread is 8 percent. The administrative costs are $350,000. What are the net proceeds to the company?
Business
1 answer:
Zolol [24]3 years ago
6 0

Answer:

$3,596,800

Explanation:

The computation of net proceeds to the company is shown below:-

Net proceeds = Number of shares of stock × Offer price × (1 - Underwriter spread percent) - Administrative cost

= 110,000 × $39 × (1- 0.08) - $350,000

= 110,000 × $39 × 0.92 - $350,000

= $3,946,800 - $350,000

= $3,596,800

So, for determining the net proceeds we simply applied the above formula.

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The liquidity of a company with significant amounts of obsolete inventory is best measured by the ______ ratio.
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<u>Answer: </u>

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<u>Explanation: </u>

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