Problem:
Maloney, Inc. has decided to sell 2,500 shares of stock. The bids received are as follows: Bidder A, quantity 500 price/share $23; Bidder B quantity 800 price/share; Bidder C quantity 1,000 price/share $21; Bidder D quantities 1,500 price/share $20; Bidder E quantities 2,500 price/share $19.
Requirement:
Question 1: If Maloney, Inc with the 2,500 shares via a Dutch auction how much equity capital is raised?
Question 2: If Maloney, Inc sells the 2,500 shares via a discriminatory auction, how much equity capital is raised?
Question 3: Explain "winner's curse" when Maloney, Inc sells the shares via discriminatory auction.
Points up in detail clarify all workings.