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

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Question

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.)

business finance

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Answer 1

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

Add a comment

Answer 2

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