The Verbatim Co. has just gone public. Under a firm commitment agreement, Verbatim received $21.55 for each of the 6.64 million shares sold. The initial offering price was $23.40 per share, and the stock rose to $29.91 per share in the first few minutes of trading. Verbatim paid $914,000 in legal and other direct costs and $189,000 in indirect costs.
Required:
What was the flotation cost as a percentage of funds raised?