JB Manufacturing is currently an all-equity firm. The equity of firm is worth \(\$ 2\) million. The cost of that equity is \(18 \%\). JB pays no taxes. JB plans to issue \(\$ 400,000\) in debt and use the proceeds to repurchase equity. The cost of debt is \(10 \%\).

1. After the repurchase the stock, what will the overall cost of capital be?

2. After the repurchase, what will the cost of equity be?