Merci Industries is selling 2,500 shares of stock via a Dutch auction. The bids received are as follows: How much will Merci receive in total from selling the 2,500 shares? Ignore all transaction and
ﬂotation costs.

Question

Merci Industries is selling 2,500 shares of stock via a Dutch auction. The bids received are as follows:  How much will Merci receive in total from selling the 2,500 shares? Ignore all transaction and
ﬂotation costs.

Quizplus · Accepted Answer

To find out how much Merci Industries will receive in total from selling the 2,500 shares, we need to calculate the average bid price.

The bids received are:

$35.00 per share for 300 shares 
$40.00 per share for 150 shares 
$45.00 per share for 850 shares 
$50.00 per share for 1,200 shares

To calculate the average bid price, we need to multiply each bid by the number of shares and add them up, then divide by the total number of shares:

(300 x 35) + (150 x 40) + (850 x 45) + (1,200 x 50) / 2,500 = $62.50

Therefore, the total amount Merci Industries will receive from selling the 2,500 shares is:

2,500 x $62.50 = $156,250

The answer choice closest to this amount is B) $62,500, which is the correct answer.

Merci Industries Is Selling 2,500 Shares of Stock Via a Dutch