I need the correct answer please. 0.85% is not correct The Collins Co. has just

Question

I need the correct answer please. 0.85% is not correct

The Collins Co. has just gone public. Under a firm commitment agreement. Collins received $35.00 for each of the 4.20 miIion shares sold. The initial offering price was $35.40 per share, and tne Stock rose to $43.00 per Share In the first few minutes of trading. Collins paid $915.000 In legal and other direct costs and $270.000 In Indirect costs (Enter your answer as directed, but do not round intermediate calculations.) What was the notation cost as a percentage of funds raised? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Total proceeds received = 4,200,000 * 33 = 138,600,000

Underwriting Cost pershare = 35.4 - 33 = 2.4

Total underwriting cost = (2.4 * 4,200,000) + 915,000 + 270,000 = 11,265,000

Floatation Cost = 11,265,000 / 138,600,000 = 8.13%

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