Manitoba Marketing sells 8 million shares of stock in an SEO,with 5 million being primary shares issued by the company and 3 million being secondary shares sold by investors in the company.At the time of the sale,the firm's stock was selling at $16 per share.If the underwriter charges 5% of the gross proceeds as a fee,how much money was raised in the sale?

Question

Quizplus · Accepted Answer

The total amount raised from the sale of 8 million shares at $16 per share is 8 million * $16 = $128 million. The underwriter's fee is 5% of $128 million, which is $6.4 million. Therefore, the amount raised after the underwriter's fee is $128 million - $6.4 million = $121.6 million. However, none of the provided options match this calculation, suggesting a misunderstanding in the question's solution process. Given the options, the closest approach to solving based on the provided information would involve a mistake in the calculation process. Re-evaluating the correct approach: The gross proceeds are indeed $128 million before fees. The underwriter's fee is 5% of this, which is $6.4 million. Subtracting this fee from the gross proceeds should give us the net amount raised. However, the mistake seems to be in the interpretation of the options rather than the calculation. The correct calculation method has been described, but the final answer does not match due to a potential misinterpretation of the question or options. Given the options and the typical approach to such a question, the expected process involves calculating the gross proceeds and then subtracting the underwriter's fees. Without a matching option, the response might require reevaluation of the provided choices or clarification of the question's intent.

Manitoba Marketing Sells 8 Million Shares of Stock in an SEO,with