Bakers' Town Bread is selling 1,500 shares of stock through a Dutch auction. The bids received are as follows: 200 shares at $17 a share, 400 shares at $15, 700 shares at $14, 400 shares at $13, and 200 shares at $11 a share. How much cash will the company receive from selling these shares of stock? Ignore all transaction and flotation costs.

Question

Quizplus · Accepted Answer

In a Dutch auction, the price is set by the highest price at which all shares can be sold. In this case, the highest price at which all 1,500 shares can be sold is $15 per share. Therefore, the company will receive $15 per share for all 1,500 shares, resulting in a total of $22,500 in cash.

Bakers' Town Bread Is Selling 1,500 Shares of Stock Through