Moonscape has just completed an initial public offering. The firm sold 5 million shares at an offer price of $10 per share.
The underwriting spread was $.40 a share.
The price of the stock closed at $15 per share at the end of the first day of trading.
The firm incurred $500,000 in legal, administrative, and other costs.
What were flotation costs as a fraction of funds raised?
(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)