Barnegat Light sold 270,000 shares in an initial public offering. The underwrite

Question

Barnegat Light sold 270,000 shares in an initial public offering. The underwriter's explicit fees were $84,000. The offering price for the shares was $54, but immediately upon issue, the share price jumped to $55. What is the best estimate of the total cost to Barnegat Light of the equity issue? $84,000 A.$354,000 B.$186,000 C.$84,000 d.$270,000 A T-bill quote sheet has 60-day T-bill quotes with a 5.43 bid and a 5.37 ask. If the bill has a $10,000 face value, an investor could buy this bill for _____. A.$9,911.73 b. $9,910.50 c.$10,000 d.$9,909.50

Explanation / Answer

solution :

best estimate of the total cost to Barnegat Light of the equity issue underwriter's explicit fees + (price immdiately upon issue-offering price)*no of shares 84000+270000(55-54)    354,000.00 investor could buy this bill for        9,909.50 $10000 - [Bid(Removing decimal)*no of days/360] 10000-[543*60/360]

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