The Telwar Company has just gone public. Under a firm commitment agreement, the company received $15.90 for each of the 25 million shares sold. The initial offering price was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of trading. The company paid $860,000 in direct legal and other costs and $330,000 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.) Flotation cost %
The Telwar Company has just gone public. Under a firm commitment agreement, the company received $15.90 for each of the 25 million shares sold. The initial offering price was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of trading. The company paid $860,000 in direct legal and other costs and $330,000 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.) Flotation cost %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
Problem 2P
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![The Telwar Company has just gone public. Under a firm commitment agreement, the
company received $15.90 for each of the 25 million shares sold. The initial offering price
was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of
trading. The company paid $860,000 in direct legal and other costs and $330,000 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.)
Flotation cost
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F742b1ee2-de14-4fb3-b337-93c1e2b52768%2Faa5efcee-9729-4dcf-95e6-0f89e92c33b2%2F0y9znon_processed.png&w=3840&q=75)
Transcribed Image Text:The Telwar Company has just gone public. Under a firm commitment agreement, the
company received $15.90 for each of the 25 million shares sold. The initial offering price
was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of
trading. The company paid $860,000 in direct legal and other costs and $330,000 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.)
Flotation cost
%
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