Final answer:
The issuer's proceeds from the IPO can be calculated by subtracting the investment bank's spread from the total expected sales. With a 16 percent spread and a $32 selling price per share, the final proceeds for Dienz Pharma issuing three million shares would be $80.64 million.
Step-by-step explanation:
To calculate the proceeds for the issuer, we must take into account the spread required by the investment bank and the expected selling price per share. With a spread of 16 percent, the investment bank will take this percentage of the selling price per share as their fee. Therefore, the issuer will receive the remaining 84 percent of the selling price. As the selling price is expected to be $32 per share and with three million shares issued, we calculate the proceeds as follows:
Total proceeds without spread = Shares Issued * Selling Price per Share
Total proceeds without spread = 3,000,000 * $32
Total proceeds without spread = $96,000,000
Now we apply the spread (investment bank's fee):
Issuer's proceeds = Total proceeds without spread * (1 - Spread Percentage)
Issuer's proceeds = $96,000,000 * (1 - 0.16)
Issuer's proceeds = $96,000,000 * 0.84
The final calculation gives us the issuer's proceeds:
Issuer's proceeds = $80,640,000
Thus, the correct answer is C. $80.64 million.