a firm commitment agreement, Raven received $$23\mathrm{.}25$ for each of the $20$ million

shares sold. The initial offering price was $$25$ per share, and the stock rose to $$29\mathrm{.}32$

per share in the first few minutes of trading. Raven 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?

Price Dilution $[$LO$3]$ Cye, Inc., has $195,000$ shares of stock outstanding. Each

share is worth $$73,$ so the company's market value of equity is $$14,235,000.$ Suppose

the firm issues $30,000$ new shares at the following prices: $$73,$$$69,$ and $$60.$ What

will the effect be of each of these alternative offering prices on the existing price per

share?