2. 7. Calculating flotation costs [LO 15.3] The Mullumbimby Horse Farm has just gone public. Under a firm commitment agreement, Mullumbimby received $21.39 for each of the 20 million shares sold.

The initial offering price was $23 per share, and the shares rose to

$28.41 per share in the first few minutes of trading. Mullumbimby paid $950 000 in direct legal and other costs and $320 000 in indirect costs. What was the flotation cost as a percentage of funds raised?