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20 July, 03:48

The firm you founded currently has 10 million shares, of which you own 8 million. You are considering an IPO where you would sell 1 million shares for $ 24 each. If all of the shares sold are from your holdings, how much will the firm raise? What will be your percentage ownership of the firm after the IPO? If all of the shares sold are from your holdings, (Select the best choice below.) A. the firm will raise $192 million from the IPO. B. the firm will raise $24 million from the IPO. C. the firm will raise no money from the IPO. D. the firm will raise $240 million from the IPO. Your percentage ownership of the firm after the IPO will be nothing %.

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  1. 20 July, 05:21
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    the firm will raise no money from the IPO.

    70% of shares owned

    Explanation:

    When a firm wants to get capita it issues new shares into the market, investors purchase the shares and give the business money. Subsequently the business does not gain money because sale of existing shares will only benefit it's holder.

    In this scenario the firm does not gain any money because the shares being sold are already existing ones.

    To get percentage ownership after the IPO

    Total shares = 10 million

    Shares owned = 8 million

    Shares sold = 1 million

    Shares left = 8 million - 1 million = 7 million

    Percentage of shares owned = (7million : 10 million) * 100

    Percentage of shares owned = 70%
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