Zero Motorcycles takes out a $10MM loan, agreeing to pay 0.6MM interest at EOY 1 and at EOY 2, when it will repay the principal. The bank also charges Zero a fee of 5% "points" for this loan, payable at EOY 0 (at loan signing). 5% "points" mean 5% of the principal amount of the loan. What is zero's pre-tax cost of debt capital (rD) for this loan?

If Zero has no other debt and its tax rate is 30%, what is the firm's post-tax cost of debt capital?