LC Delivery has decided to sell 1,800 shares of stock through a Dutch auction. The bids received are as follows: 600 shares at $37 a share, 800 shares at $36, 900 shares at $35, 200 shares at $34, and 100 shares at $32 a share. How much will the company receive in total from selling the 1,800 shares? Ignore all transaction and flotation costs.

Question

Quizplus · Accepted Answer

In a Dutch auction, the price starts high and gradually decreases until all the shares are sold. In this case, the highest bid is $37 for 600 shares, so the company will first sell those shares at that price. Then, they will move on to the next bidder and sell 800 shares at $36 each. Finally, they will sell the remaining 400 shares at $35 each.

Therefore, the total amount the company will receive is:

(600 x $37) + (800 x $36) + (400 x $35) = $22,200 + $28,800 + $14,000 = $63,000

So the answer is C.

LC Delivery Has Decided to Sell 1,800 Shares of Stock