Please show work. Thanks!

ATC has paid a dividend of $2 per share last year. Its target capital structure is 70% equity and 30% debt. It has 2 million common shares outstanding and a net income of $10 million. ATC has forecasted that it would need $12 million to fund profitable investments next year. Suppose ATC decides not to follow the residual model. ATC wants to increase dividends by 10% next year, maintain the target capital structure and fund the entire capital budget. How much equity and debt (in millions) respectively will have to be raised externally?

$4.48, $1.92

$5.60, $3.00

$6.40, 0.00

$2.80, $3.60