Question

Barnegat Light sold 190,000 shares in an initial public offering. The underwriter's explicit fees were $68,000. The offering price for the shares was $38, but immediately upon issue, the share price jumped to $45. What is the best estimate of the total cost to Barnegat Light of the equity issue? Multiple Choice $68,000 $1,262,000 $1,398,000 $1,330,000

Answer 1

$1,398,000

Step-by-step explanation:

Calculation for What is the best estimate of the total cost to Barnegat Light of the equity issue

Total cost = $68,000 + ($45 - $38)190,000 shares

Total cost = $68,000+($7)190,000 shares

Total cost = $68,000+$1,330,000

Total cost =$1,398,000

Therefore the best estimate of the total cost to Barnegat Light of the equity issue will be $1,398,000