Question

The following table reflects results of a Dutch auction:

Bidder	Quantity	Price
A	100	20
B	150	18
C	150	16
D	200	14
E	250	12
F	250	10

When the company decides to issue 300 the amount that they could raise would be:

1. 4.800
2. 5.100
3. 5.500

Answer 1

In case of Dutch auction ,price of share is the lowest price at which the company will be able to issue all the shares which they have decided to issue .And all the shares are then issued at that lowest price ,it does not matter whether any bidder has offered to buy at higher price .

In the given case,company will be able to issue 300 shares at $16

Hence ,amount that they could raise = price per share * Number of shares

=16*300

=4800

Hence,correct option is (A)