Rockwood wants to issue 1000 shares through an IPO. The institutional investors who have private information on the true value of Rockwood estimate the value to be either $68 or $55 equally likely. Assume once they make the estimation, their estimation is right. On the other hand, the uninformed investors always buy with no estimation on their own. In the market, there are 1000 uninformed investors and 250 institutional investors. One investor can only buy one share. If the offer is oversubscribed, the number of shares will be allocated to the two type of investors based on their proportion. Suppose now Rockwood announces its IPO price to be $60, what is the total expected payoff of all the uninformed investors post-IPO (the price will equal to the true value once quoting starts)?

Select one:

a. $200

b. -$200

c. $700

d. -$700