High Mountain Gear issued 385,000 shares of stock last week.The underwriters charged a spread of 7.2 percent in exchange for agreeing to a firm commitment.The legal and accounting fees were $302,000.The company incurred $39,000 in indirect costs.The offer price was $17 a share.Within the day of trading, the stock was selling for $18.80 a share.What was the flotation cost as a percentage of the funds raised?
A) 31.90 percent
B) 35.78 percent
C) 32.51 percent
D) 26.26 percent
E) 29.08 percent
Correct Answer:
Verified
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