consider a firm 1 that is unlevered and firm 2 which is levered with target debt to equity ratio(b/s)=1.Both firm have exactly the same perpetualnet operating income,NOI OF 180 before tax.the before tax cost of debt,kb is the same as risk free rate.the corporate tax is 0.5 .given the following market parameters,

E(rm)=0.12 d2(market variance)=0.0144 rf=0.06 beta of firm 1=1 beta of firm 2=1.5

1.find the cost of capital for each of the firms (ignore personal taxes).