Question

Hilltop Brokers Inc. is offering 1,300 shares of stock in a Dutch auction. The bids include: Bidder Quantity Price А 350 $22 B 200 $21 С 650 $20 D 1,000 $18 E 300 $16 How much cash will Hilltop receive from selling these shares? Ignore all transaction and flotation costs. $26,000 $22,800 $20,800 $26,700 $23,400

Answer 1

Answer: Option-(B): $22,800 Reason: Bidder Quantity Price Cash recd. D 1,000 $18 $18,000 (1000 shares x $18] E 300 $16 $4,800 [300 shares x $16] 1,300 Cash received $22,800 ($18000 + $4800]

Answer 2

1,300*18

because you want the highest price. so you try to get as low as possible to fill the 1300 shares. 350+200+650= 1200 shares, thats not enough to fill 1300 shares so you will have to go even lower to the 1000, which has an 18$ price. Now you have 2,200 shares at  18$ but that doesnt matter. The company only has to offer 1300 so 1300*18= 23,400$. 

Hope this made sense, i saw the previous response and its wrong so i wanted to write the correct information out there  for future finance student