b

Company and company L are identical in every respect except company is unlevered and company Lhas $8.000.000 perpetual debt with an interest rate of 4% Both companies are expecting to have an EBIT of $1.200.000 in perpetuity and all earnings will be immediately distributed to common shareholders Company has a cost of equity of 6%. Assume that all Modigliani and Miller assumptions are satisfied. Calculate the cost of eqully for the levered firm occording to MM proposition II without taxes. Do not round Intermediate calculationis. Round the final answer to 2 decimal places. Omit the sign in your response. For example, an answer of 15.39% should be entered as 15:39) Numer Response