IPO Costs. Moonscape has just completed an initial public offering. The firm sold $3$ million

shares at an offer price of $$8$ per share. The underwriting spread was $$\mathrm{.}50$ a share. The firm

incurred $$100,000$ in legal, administrative, and other costs. $($LO$15-2)$

a$.$ What were flotation costs as a fraction of funds raised?

b$.$ Were flotation costs for Moonscape higher or lower than is typical for IPOs of this size $$12$ as the closing price of the security.