A firm finances a $40 million project by borrowing $20 million to be repaid over the life of the project and by issuing common stocks worth of $20 million. Determine the required rate of return, both before- and after-tax. Borrowed funds cost 10%, equity costs 20%, and the tax rate is 40%. Revenue (R) will be independent of the financing method

A: 6 million

B:2million C:3.5million D:1.5million E:7million