Problemthe raven co has just gone public under a firm, Ask an Expert

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Problem:

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $18.60 for each of the 30 million shares sold. The initial offering price was $19.40 per share, and the stock rose to $22.40 per share in the first few minutes of trading. Raven paid $640,000 in direct legal and other costs and $220,000 in indirect costs.

Required:

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

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167184

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