High Mountain Gear issued 240,000 shares of stock last week. The underwriters charged a 7.85% spread in excnahge for agreeing to a firm committment. The legal and accounting fees were $385,000. The company incurred $98,000 in indirect costs related to management time and other internal expenses. The offer price was $21 a share. Within the first hour of trading, the stock was selling for $23.20 a share. What was the flotation cost as a percentage of the funds raised?
A) 21.53 percent
B) 25.29 percent
C) 27.46 percent
D) 33.80 percent
E) 41.22 percent