Two firms, Top-Dog and Under-Dog, generate $70000 in net operating income each year. Top-Dog has a capital structure consisting of 100% equity, whereas Under-Dog uses 50% debt and 50% equity. Under-Dog must pay $35000 in interest on its debt each year. If the tax on corporate profits is 35%, what is the value of the tax shield for Under-Dog each period, employing the M&M "modified" model?

According to the sustainable growth model, if a firm finances its assets with 85 percent debt and 15 percent equity, and retains $1.65 million in earnings in a given year, the firm can afford to borrow an additional __________ to maintain the desired mix of debt and equity.