Answer:
correct option is b. $3,679,800
Explanation:
given data
offering = 130,000 shares
offer price = $38
underwriter spread = 8 percent
administrative costs = $865,000
solution
we get here Net proceeds from sale that is express as
Net proceeds = Gross proceeds - Underwriter's spread - Administrative costs ....................1
here Gross proceeds from sale is = offering share × offer price
Gross proceeds from sale is = 130000 × $38
Gross proceeds from sale is = $49,40,000
and Underwriter's spread will be offering share × offer price × underwriter spread %
Underwriter's spread = $49,40,000 × 8%
Underwriter's spread = $3,95,200
so Net proceeds will be
Net proceeds = $49,40,000 - $3,95,200 - $865,000
Net proceeds = $3,679,800
so correct option is b. $3,679,800
