The Titanic Company has just gone public. Under a firm commitment agreement, Titanic received$14 for each of the 2 million shares sold. The initial offering price was $15 per share, and the stockrose to $16.40 per share in the first few minutes of trading. Titanic paid $500,000 in administrative costs. The total floatation costs for the new issue are
A) $2,000,000.
B) $4,800,000.
C) $2,800,000.
D) $5,300,000.

Question

Quizplus · Accepted Answer

The Answer of The Titanic Company has just gone public. Under a firm commitment agreement, Titanic received$14 for each of the 2 million shares sold. The initial offering price was $15 per share, and the stockrose to $16.40 per share in the first few minutes of trading. Titanic paid $500,000 in administrative costs. The total floatation costs for the new issue are
A) $2,000,000.
B) $4,800,000.
C) $2,800,000.
D) $5,300,000.

The Titanic Company Has Just Gone Public