The Random Company recently completed its IPO, with the assistance of Firm Commitment Underwriters Inc. In a firm commitment agreement Random received $17.67 per share and sold a total of 15 million shares. The initial offering price was $19 per share and the stock rose to $23.18 per share in the first few minutes of trading. Random paid $900,000 in direct legal and other costs, and $320,000 in indirect costs. Calculate the flotation cost as a percentage of funds raised.