Sherpa Movers Has Just Gone Public

Multiple Choice

Sherpa Movers has just gone public.Under a firm commitment agreement,the firm received $34.40 for each of the 3.5 million shares sold.The initial offering price was $37 per share,and the stock rose to $43 per share in the first few minutes of trading.Sherpa Movers paid $896,000 in legal and other direct costs and $225,000 in indirect costs.What was the flotation cost as a percentage of the funds raised?

A) 22.91 percent
B) 23.85 percent
C) 24.49 percent
D) 26.17 percent
E) 28.60 percent