Question

The cap on the price band(in book building) shall be less than or equal to ___________ per cent of floor price.

• A. $100$
• B. $120$
• C. $200$
• D. $500$

Answer 1

The correct option is B $120$

The offer document may have a floor price for the securities or a price band within which the investors can bid. The spread between the floor and the cap of the price band can not be more than 20%. In other words, it means that the cap should not be more than 120% of the floor price.