Nelson Paints Recently Went Public by Offering 50,000 Shares of Common

Nelson Paints recently went public by offering 50,000 shares of common stock to the public. The underwriters provided their services in a best efforts underwriting. The offering price was set at $17.50 a share and the gross spread was $2.30. After completing their sales efforts, the underwriters determined that they sold a total of 47,500 shares. How much cash did the company receive from its IPO?

A) $722,000
B) $717,000
C) $735,000
D) $705,000
E) $748,000

Correct Answer:

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