Mason Materials is offering 800 shares in a Dutch auction IPO. The following bids have been received: How many shares will be allocated to Bidder A?

Question

Mason Materials is offering 800 shares in a Dutch auction IPO. The following bids have been received:  How many shares will be allocated to Bidder A?

Quizplus · Accepted Answer

In a Dutch auction IPO, shares are allocated starting with the highest bidder and working down until all shares are allocated or until the lowest bid is reached.

The highest bid in this case is $20 per share (represented by the bid code TB4324_00_TB4324_00_TB4324_00), which was submitted by Bidder A. There are a total of 800 shares available.

Starting with the highest bid and working down, we allocate shares to each bidder until we reach the lowest bid that can be satisfied. Bidder A's bid of $20 per share can be satisfied up to 145 shares, so that is how many shares they will receive.

Therefore, the answer is D) 145.

Mason Materials Is Offering 800 Shares in a Dutch Auction