The Raven Co. has just gone public. Under a firm commitment agreement, Raven rec
ID: 2635418 • Letter: T
Question
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.
What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
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.
Explanation / Answer
(15M+680K+240K)/468M = 3.40%
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