In a Canadian IPO issues, the issuing company has incurred $8 million for the flotation costs and legal fees. The issue involves 45 million shares. As a firm commitment written deal, the underwriter agrees to buy the shares at $19 each and resells to the public at $20.50 per share. What will be the percentage of direct costs required in this deal?

a. 11.5%

b. 10.6%

c. 9.1%

D. 8.4%

PLEASE SHOW ALL OF YOUR CALCULATIONS. THANKS!!!