Question

Company ABC would like to sell an additional 1000 shares using the Dutch Auction method. Using the table below, Bidder E will receive ______ shares. Bidder Quantity Price A 500 $30 B 300 $28 C 100 $25 D 400 $20 E 300 $19 Select one: a. 0 b. 100 c. 286 d. 300 e. 400

Answer 1

In Dutch auction method, prices start high and are dropped until a bidder accepts the ongoing price.

Company ABC sells 1000 shares.

Highest bidder is A, $30, 500 shares will be allotted A

Then no other bidder bids at $30, then further shares are allotted to next highest bidder

Second highest bidder B, $28, 300 shares are allotted

Third highest bidder C $25, 100 shares are allotted

Fourth highest bidder D, $20 , 100 shares are allotted

So, 1000 were allotted, no shares are outstanding.

Bidder E will receive 0 shares

Answer 'a' zero