. Bolivar Basic Industries (BBI) expects to be worth either $80 million, $100 million or $200 million in one year with equal probabilities. The required rate of return on BBIs assets is 14%. BBI has two bonds outstanding: a senior bond with a promised payment in one year of $80 million at a promised rate of return of 5% and a junior bond with a promised payment of $50 million with an expected return of 9%. What is BBIs levered cost of equity? What is the promised rate of return on the junior debt?