Bellevue Co. has just gone public. Under a firm commitment agreement, the company received $36.27 for each of the 7.5 million shares sold. The initial offering price was $39 per share and the stock rose to $43.82 per share in the first few minutes of trading. The company paid $2.25 million in direct legal and other costs and $475,000 in indirect costs. What was the flotation cost as a percentage of funds raised?