Which of the following statements is correct? a. in a "dutch auction," investors who want to buy shares in an ipo submit bids indicating how many shares they want to buy and the price they are willing to pay. the company determines how many shares it wants to sell. the highest price that enables the company to sell the desired number of shares is the price that all buyers must pay. b. the term "ipo" stands for introductory price offered, and it is the price at which shares of a new company are offered to the public. c. it is possible that the price set in an ipo is so high that investors will refuse to buy the number of shares that the company wants to sell. in this situation, the ipo is said to be oversubscribed. d. it is possible that the price set in an ipo is so low that investors will want to buy more shares than the company wants to sell. in that case, the company will have to issue more shares than it wants to sell. e. ipo prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public.

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?