The dollar amount of the flotation costs by percent of gross proceeds is $5,000
We need to know about the percent theory first, percent is per 100. So when A is 1% of B it means that
A = 1/100 x B
From the question, we know that
The gross proceeds is given by = $250,000 and
the flotation cost is given by = 2% of gross proceeds.
We can write the flotation cost as
Flotation cost = 2/100 x $250,000
Flotation cost = 2/100 x $250,000
Flotation cost = $5,000
Hence, the dollar amount of the flotation costs is $5,000
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