You Decide to Take Your Company Public by Offering a Total

Multiple Choice

You decide to take your company public by offering a total of 50,000 shares of common stock to the public in an initial public offering (IPO) . You hire an underwriter who arranges a full commitment underwriting and suggests an initial selling price of $28 a share with an 8 % spread. As it turns out, the underwriters only sell 48,500 shares. How much cash will you receive from your IPO?

A) $1,249,360
B) $1,288,000
C) $1,299,360
D) $1,308,600
E) $1,400,000