The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $23.25 for each 20 million shares sold. The initial public offering was $25 per share, and the stock rose to $29.32 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?