Clear Glass Company s investment banker has determined that the following
Clear Glass Company’s investment banker has determined that the following rate schedule would apply if the firm raises funds by issuing new debt (bonds):
Amount of New Debt Cost, rd
$ 1 – $ 250,000 ........... 8.0%
$ 250,001 – $1,000,000 .......... 10.0
$1,000,001 – $5,000,000 .......... 14.0
Greater than $5,000,000 ........... 20.0
For Clear Glass, how many break points are associated with debt when computing the WACC?

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