In a recent IPO, the Sausage Co. offered 1.4 million shares of stock at an offer price of $16 a share. The underwriting was conducted on a best efforts basis with a spread of 7.0%. The Sausage Co. received a total of $20,079,868 in sale proceeds. How many shares were sold?

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Quizplus · Accepted Answer

The underwriting spread is the difference between the offer price and the proceeds received by the company. In this case, the spread is 7.0%, or $1.12 per share. The total proceeds received by the company are $20,079,868. To find the number of shares sold, we can divide the total proceeds by the offer price per share, minus the spread:Number of shares sold = Total proceeds / (Offer price - Spread)Number of shares sold = $20,079,868 / ($16 - $1.12)Number of shares sold = 1,349,453 shares

In a Recent IPO, the Sausage Co