1. Tapley, Inc. can raise up to $5M in new debt at a before-tax cost of 8%. If more debt is required, the initial cost will be 8.5%, and if more than $10M of debt is required, the cost will be 9%. What are the two break points for debt when the capital structure is 60% debt and 40% equity?

BP_{Debt 1} =

BP_{Debt 2} =