This requires Android 5.0

Raised Button

Inherit your button style from Widget.Material.Button, and the standard elevation and raising action will automatically be applied.

<style name="Your.Button" parent="android:style/Widget.Material.Button">
    <item name="android:background">@drawable/raised_button_background</item>
</style>

Then you need to create a raised_button_background.xml file with your button’s background color inside a ripple tag:

<ripple xmlns:android="http://schemas.android.com/apk/res/android"
    android:color="?attr/colorControlHighlight">
    <item android:drawable="@color/button_color"/>
</ripple>

Flat Button

Edit: Instead of my previous advice for flat buttons, you should instead use follow the advice given by Stephen Kaiser below:

<Button
    android:layout_width="wrap_content"
    android:layout_height="wrap_content"
    android:text="DONE"
    style="?android:attr/borderlessButtonStyle"
/>

Edit: If you are using Support Library, you can achieve the same result on Pre-Lollipop devices by using style="?attr/borderlessButtonStyle". (notice the absence of android:) The above example then becomes

<Button
    android:layout_width="wrap_content"
    android:layout_height="wrap_content"
    android:text="DONE"
    style="?attr/borderlessButtonStyle"
/>