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Luther Industries is in the process of selling shares of stock in an auction IPO.At the end of the bidding period,Luther's investment bank has received the following bids:

-What will the offer price of these shares be if Luther is selling 1 million shares?

Question

Use the information for the question(s)below.
Luther Industries is in the process of selling shares of stock in an auction IPO.At the end of the bidding period,Luther's investment bank has received the following bids:
 
-What will the offer price of these shares be if Luther is selling 1 million shares?

Quizplus · Accepted Answer

To find the offer price, we need to calculate the clearing price, which is the price at which all the shares can be sold. First, we need to add up all the bids: $16.50 + $17.00 + $17.50 + $17.75 + $18.00 = $86.75 million. Next, we divide this by the number of shares being sold: $86.75 million / 1 million shares = $17.25 per share. Therefore, the offer price will be $17.25.

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