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LC Delivery has decided to sell 1,800 shares of stock through a Dutch auction. The bids...

LC Delivery has decided to sell 1,800 shares of stock through a Dutch auction. The bids received are as follows: 600 shares at $37 a share, 800 shares at $36, 900 shares at $35, 200 shares at $34, and 100 shares at $32 a share. How much will the company receive in total from selling the 1,800 shares? Ignore all transaction and flotation costs.

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Answer #1

In a dutch auction, the selling price is the highest price at which all shares can be sold

Total Number of shares = 1800

600 shares are sold at $37

800 shares are sold at $36

900 shares are sold at $35

Hence, all 1800 shares should be sold at $35

Total Amount Received = 1800*35 = $63,000

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