Fortune Hotels Issues an IPO on a Best-Effort Basis

question 9

Multiple Choice

Fortune Hotels issues an IPO on a best-effort basis. The company's investment bank requires a spread of 20 percent of the selling price. Five million shares are issued. The average selling price is expected to be $31. What are the net proceeds per share for the issuer?

• A) $27.50
• B) $22
• C) $31
• D) $24.8

---

Definitions:

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, characterized by open-mindedness and a questioning attitude.

Monitor

The act of regularly observing and checking the progress or quality of something over a period of time.

Scoring Rubric

A set of criteria and standards typically used in educational settings to assess the quality of students' work or performance.

Close-Mindedness

The unwillingness to consider or accept different ideas or opinions.