Company A and Company B are identical in every respect except company A is unlevered and company B has $1,000,000 perpetual debt with an interest rate of 6%. Both companies are expecting to have an EBIT of $300,000 in perpetuity and all earnings will be immediately distributed to common shareholders. Company A has a cost of equity of 10%. Assume that all Modigliani and Miller assumptions are satisfied. Calculate the cost of equity for the levered firm according to MM proposition I without taxes.