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Problem:

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.60 for each of the 30 million shares sold. The initial offering price was $16.10 per share, and the stock rose to $17.30 per share in the first few minutes of trading. Raven paid $680,000 in direct legal and other costs and $240,000 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.:- M91167539

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