Homework Answers
We will find the last price that is given to the bidder. That will be the price at which the shares will be offered.
| Bidder | Quantity | Cumulative | Price |
| E | 150,000 | 150,000 | $6.50 |
| D | 500,000 | 650,000 | $6.25 |
| C | 650,000 | 1,300,000 | $6.00 |
| B | 700,000 | 2,000,000 | $5.75 |
Answer = $5.75
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In Dutch Auction, the auctioneer starts with highest asking price. Therefore allocation is as follows
| Bidder | Price | Quantity Remaining | Quantity Asked | Quantity Allocated |
| E | $6.50 | 2,000,000 | 150,000 | 150,000 |
| D | $6.25 | 1,850,000 | 500,000 | 500,000 |
| C | $6.00 | 1,350,000 | 650,000 | 650,000 |
| B | $5.75 | 700,000 | 700,000 | 700,000 |
And nothing will be allocated to Bidder A.
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