Flotation cost

[NuminorWest]

Acme corp has decided to build a new shipping department. The cost is $125 million. Acme decided to finance this project using its debt-equity ratio of 1.5. The issue cost of equity is 6% and the issue cost of debt is 1%. What is the total flotation cost?

 

[Denis]

http://www.google.ca/search?hl=en&sourc ... q=null&oq=

 

[NuminorWest]

This is what I have so far:

Amount needed to finance = 75,000,000
Must Raise = 75,000,000 /(1-0.01) = 75,757,576
Flotation cost = 757,576

Is this correct?