Company to issue $2.0 mil of perpetual debt and use the proceeds to repurchase common stock.

Bonds will sell at par, coupon rate 5%

company is all-equity worth $7.5 mil with 400,000 shares of common stock outstanding.

Annual pre-tax earnings are $1.5 mil, this is expected to remain contact in perpetuity

Tax rate is 35%

What is the required return on the company's equity after restricting?

I think I use the formula for levered equity... I need to know how to compute the return on unleveredequity and return on debt.

Thank you