Delta corporation has the following capital structure:

cost (aftertax) weights weighted cost debt (kd) 5.5 % 25 % 1.38 % preferred stock (kp) 10.5 25 2.63 common equity (ke) (retained earnings) 10.5 50 5.25 weighted average cost of capital (ka) 9.25 %

a. if the firm has $26 million in retained earnings, at what size capital structure will the firm run out of retained earnings? (enter your answer in millions of dollars (e. g., $10 million should be entered as "10"

b. the 5.5 percent cost of debt referred to earlier applies only to the first $18 million of debt. after that the cost of debt will go up. at what size capital structure will there be a change in the cost of debt?