The Wiley Oakley Co. has just gone public. Under a firm commitment agreement, the company received $20.95 for each of the 6.58 million shares sold. The initial offering price was $22.80 per share, and the stock rose to $29.31 per share in the first few minutes of trading.
The company paid $908,000 in legal and other direct costs and $183,000 in indirect costs. What was the flotation cost as a percentage of funds raised?
Flotation cost percentage %