Market stabilization:
Select one:
a.usually lasts 3-6 days but can last up to 60 days if a
security is difficult to distribute.
b. is the action by the managing investment dealer to keep the
price of newly issued securities from rising quickly.
c. is accomplished by repurchasing securities as the market
price moves below the initial public offering price.
d. can always keep prices of securities from falling.
Maxwell Corp. is coming to the market with a new offering of
300,000 shares, at $25 to the public. Maxwell will receive $22 per
share. The firm has 1 million shares outstanding and earnings of $6
million. What is the amount of dilution in earnings per share?
Select one:
a. $2.00.
b. $1.77.
c. No dilution occurs since new money is received by
Maxwell.
d. $1.38.
Market stabilization: Select one: a.usually lasts 3-6 days but can last up to 60 days if a security is difficult to dist
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