The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.80 for each of the 18 million shares sold. The initial offering price was $18.00 per share, and the stock rose to $19.50 per share in the first few minutes of trading. Raven paid $800,000 in direct legal and other costs and $300,000 in indirect costs. What was the flotation cost as a percentage of funds raised?