Deep Hollow Oil issued 135,000 shares of stock last week. The underwriters charged a spread of 8.25 percent in exchange for agreeing to a firm commitment. The legal and accounting fees amounted to $418,000 and the company incurred $48,000 in indirect costs. The offer price was $33 a share. Within the first hour of trading, the stock price increased to $36 a share. What was the flotation cost as a percentage of the funds raised?