The Rouge Co. has just gone public. Under a firm commitment agreement, Rouge received $17.67 for each

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The Rouge Co. has just gone public. Under a firm commitment agreement, Rouge received $17.67 for each of the 15 million shares sold. The initial offering price was $19 per share, and the stock rose to $23.18 per share in the first few minutes of trading. Rouge paid $900,000 in direct legal and other costs, and $320,000 in indirect costs. What was the flotation cost as a percentage of funds raised?

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Fundamentals of Corporate Finance

ISBN: 978-0071051606

8th Canadian Edition

Authors: Stephen A. Ross, Randolph W. Westerfield

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