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Roundtree Software is going public using an auction IPO. The firm has received the following​ bids:...

Roundtree Software is going public using an auction IPO. The firm has received the following​ bids:

Price​ ($)

Number of Shares

14.60

   160,000

14.40

  260,000

14.20

  560,000

14.00

1,100,000

13.80

1,280,000

13.60

  860,000

13.40

 420,000

Assuming Roundtree would like to sell 2.08 million shares in its​ IPO, what will be the winning auction offer​ price?

The price will be

​$nothing

per share. ​ (Round to the nearest​ cent.)

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Answer #1
Price​ ($) Number of Shares Cumulative Shares
14.6 160000 160000
14.4 260000 420000
14.2 560000 980000
14 1,100,000 2080000
13.8 1,280,000 3360000
13.6 860000 4220000
13.4 420000 4640000
The winning price is the price at which cumulative number of shares equal shares to be sold
i.e. $14 per share
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