The Raven Co. has just gone public. Under a firm commitment agreement, Raven rec

Question

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.30 for each of the 15 million shares sold. The initial offering price was $18.00 per share, and the stock rose to $20.10 per share in the first few minutes of trading. Raven paid $500,000 in direct legal and other costs and $150,000 in indirect costs.

What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.30 for each of the 15 million shares sold. The initial offering price was $18.00 per share, and the stock rose to $20.10 per share in the first few minutes of trading. Raven paid $500,000 in direct legal and other costs and $150,000 in indirect costs.

What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Answer:

Total Floatation cost = $500000 + $150000 = $650000

Total Funds Received = 15,000,000 Shares *$15.30 = $229,500,000

Net funds raised = 229500000

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