Miller Motors has decided to sell 1,800 shares of stock through a Dutch auction.The bids received are as follows:
How much will Miller Motors receive in total from selling the 1,600 shares? Ignore all transaction and flotation costs.

Question

Miller Motors has decided to sell 1,800 shares of stock through a Dutch auction.The bids received are as follows: 
How much will Miller Motors receive in total from selling the 1,600 shares? Ignore all transaction and flotation costs.

Quizplus · Accepted Answer

In a Dutch auction, the price is set by the highest bid that will cover the number of shares being offered for sale. From the bids received, the highest bid that will cover the 1,800 shares is $20. The total amount that Miller Motors will receive is then calculated as:
Total amount = number of shares sold x clearing price
Total amount = 1,800 x $20 = $36,000
Therefore, the correct answer is C.

Miller Motors Has Decided to Sell 1,800 Shares of Stock