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Mechanics of raising equity capital

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Round Tree software is going public using a auction IPO. The firm has received the following bids:

Price ($) Number of shares

14.00 100,000
13.80 200,000
13.60 500,000
13.40 1,000,000
13.20 1,200,000
13.00 800,000
12.80 400,000

Assuming Roundtree would like to sell 1.8 million shares in its IPO, what will the winning auction offer price be?

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Solution Summary

The mechanics of raising equity capital is determined for Roundtree. The winning auction offer price is determined.

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