The fixed price at which the stock is purchased from issuer by the investment banks is called ____________?
Correct answer: B. net proceeds
- A. non-cumulative proceeds
- B. net proceeds
- C. Gross proceeds
- D. cumulative proceeds
Explanation
Net proceeds are the amount the issuing company receives after underwriting discounts and issue expenses are deducted from the offering proceeds. Gross proceeds refer to the total amount raised before those deductions.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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