The Sugarland Co. has just gone public. Under a firm commitment agreement, the company received $32.10 for each of the 4.11 million shares sold. The initial offering price was $34.50 per share, and the stock rose to $41.20 per share in the first few minutes of trading. The company paid $906,000 in legal and other direct costs and $252,000 in indirect costs. What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The Sugarland Co. has just gone public. Under a firm commitment agreement, the company received $32.10 for each of the 4.11 million shares sold. The initial offering price was $34.50 per share, and the stock rose to $41.20 per share in the first few minutes of trading. The company paid $906,000 in legal and other direct costs and $252,000 in indirect costs. What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Sugarland Co. has just gone public. Under a firm commitment agreement, the company received $32.10 for each of the 4.11 million shares sold. The initial offering price was $34.50 per share, and the stock rose to $41.20 per share in the first few minutes of trading. The company paid $906,000 in legal and other direct costs and $252,000 in indirect costs. What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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