IPO: Fortune Hotels issues an IPO sold on a best-efforts basis. The company's investment bank demands a spread of 20 percent. Five million shares are issued. However, the bank was overly optimistic and could not sell at the offer price of $31. If the net proceeds to the issuer is $110 million, how much did the investment bank receive?
A) $22.0 million
B) $27.5 million
C) $31.0 million
D) None of the above
Correct Answer:
Verified
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