Under a firm commitment agreement, Zeke, Co. went public and received $32.75 for each of the 7.9 million shares sold. The initial offer price was $35 and the stock rose to $38.18. The company paid $560,000 in direct flotation costs and $215,000 in indirect costs. What was the flotation cost as a percentage of funds raised?

Multiple Choice

• 7.11%

• 25.81%

• 22.22%

• 27.22%

• 16.93%