The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $18.70 for each of the 30 million shares sold. The initial offering price was $19.90 per share, and the stock rose to $24.00 per share in the first few minutes of trading. Raven paid $700,000 in direct legal and other costs and $250,000 in indirect costs.

What was the flotation cost as a percentage of funds raised?