Turbo technology corp. recently went public with an initial public offering of 3.03 million shares of stock. the underwriter used a firm commitment offering in which the net proceeds was $7.65 per share and the underwriter's spread was 7 percent of the gross proceeds. turbo also paid legal and other administrative costs of $230,000 for the ipo. calculate the gross proceeds per share received by turbo from the sale of the 3.03 million shares of stock.(a) $7.73(b) $7.65(c) $8.23(d) $8.31

$8.23 per share

Explanation:

Total funds received by Turbo = (3.03 million shares x $ 7.65 per share) - $230,000

= $23,179,500 - $230,000 = $22,949,500

Gross Proceeds = Net Proceeds + Underwriter's Spread  

Gross Proceeds = (Gross Proceeds * 0.07) + $7.65 per share

(Gross Proceeds – 0.07 Gross Proceeds) = $7.65 per share

Factorize gross proceeds mathematically to get

Gross Proceeds (1-0.07) = $7.65 per share

Gross Proceeds (0.93) = $7.65 per share

Gross Proceeds =

Gross Proceeds = $8.23 per share