$3-$ The Red Sea company, a zero growth firm, has an expected EBIT of $$100,000$ and a corporate tax rate of $30\%.$ The Red Sea company uses $$500,000$ of $12\mathrm{.}0\%$ debt, and the cost of equity to an unlevered firm in the same risk class is $16\mathrm{.}0\%.$b$-$ Refer to the data for Red Sea company, What is the firm's cost of equity according to MM