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The Telwar Company has just gone public. Under a firm commitment agreement, the company received $ 1 7 . 8 0 for each of the

The Telwar Company has just gone public. Under a firm commitment agreement, the company received $17.80 for each of the 25 million shares sold. The initial offering price was $19.40 per share, and the stock rose to $22.90 per share in the first few minutes of trading. The company paid $840,000 in direct legal and other costs and $320,000 in indirect costs. What was the flotation cost as a percentage of funds raised?

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