A.

Which one of the following is an indirect cost of issuing securities?

accounting fees

management time spent on the offering

legal fees

underwriting fee

B.

Which one of the following is referred to as the abnormal return?

Green Shoe option

decrease in existing stock price when a new issue is announced

loss from selling a stock for less than its actual market value

underwriters profit

C.

The Tire Treader needs to raise $14 million to build a new manufacturing facility. The estimated direct costs of floating an equity issue to fund this project are $505,000 and the underwriting spread is 7.5 percent. What is the minimum number of shares of stock the firm must sell to reach its financing goal if the offer price is set at $23.00 a share?

617,877.00 shares

653,626.00 shares

681,786.00 shares

636,263.00 shares