Final answer:
The net proceeds per share for Fortune Hotels's IPO, after a 20% spread, are $24.80. The total proceeds for the issuer are $124 million, calculated by multiplying the net proceeds per share by the total number of shares issued (5 million).
Step-by-step explanation:
To calculate the net proceeds per share for Fortune Hotels's IPO, we need to consider the investment bank's spread, which is 20% of the selling price. With an average selling price of $31 per share, the spread would be 20% of $31, which is $6.20. Therefore, the net proceeds per share would be the selling price minus the spread, which is $31 - $6.20, amounting to $24.80 per share.
For the total proceeds for the issuer, we multiply the net proceeds per share by the total number of shares issued. Thus, the proceeds for the issuer would be 5 million shares multiplied by the net proceeds per share of $24.80, resulting in a total of $124 million.