(b) Namib Mills has the following information which has been compiled about the companys current costs of two sources of capital:

Source of capital	Range of new financing	cost
long-term debt	$0 to $1,000,000	10%
	$1,000,001 and above	11%
common stock equity	$0 to $2,000,000	13%
	$2,000,001 and above	14%
retained earnings		12%

Namib Mills uses the weights based on the desired target capital structure proportions outlined in (b) above:

(i) Calculate the breakpoints associated with the firms retained earnings for the three proposed capital structures. (3 marks)

(ii) Calculate the breakpoints associated with the firms financial situation for the current capital structure? (2 marks)

(iii) Calculate the weighted average cost of capital associated with the current structure and below the first breakpoint in (ii). (3 marks)

(iv) Calculate the weighted average cost of capital associated with the firms 50 percent debt capital structure. (2 marks)