I have done A, B, C

I am asking for help on question D. Thank you in advance

10. Miller company will have retained earnings of $2,000,000 this year. The marginal tax rate is 40 percent. The company can raise debt at a 11.5 percent interest rate for any amount of debt less than $1,500,000. If the firm raises more than $1,500,000, a 12.5 percent interest rate will apply. The risk-free rate is 5%, the return on the stock market is 12% and the firm has a beta of 1.6. The next dividend to be paid by Miller will be $2.00, its stock price is $20.00, and its growth rate expected in earnings and dividends is 6 percent. If Miller issues new common stock the floatation cost will be 10 percent. Miller plans to finance all capital expenditures with 70 percent debt and 30 percent equity. a) What are the break points due to (1) retained earnings and to (2) cheap debt being used up? (2 points) RE = 2,000,000 Cheap Debt = 2,000,000 / 30% = $6,666,667 b) What is the estimated cost of retained earnings? (use only the average of the Discounted Dividend and CAPM approaches) (4 points) RE = 5% + (12% - 5%) * 1.6 = .05 + (.12 - .05) * 1.6 16.2% = floatation c). What is the cost of new costs, raised by selling stock? common equity, net of (3 points) Cost of New Common Equity = 20 * 90% = 18 (2/18) +6% = 17.1% d). There are two break points in Miller's MCC schedule; one when retained earnings have been used up and one when low-cost debt has been used up. Therefore, there are three intervals in the MCC schedule. What is the marginal cost of capital in each of these intervals? (6 points)