Stoddard Datsun Restorations $($SD$)$ is an all$-$equity firm, that expects free cash flows of $$450,000$ per year in perpetuity. The cost of unlevered equity is $12\%.$ SDR is considering a recapitalization, where it would issue $$750,000$ in debt at a $6\%$ interest rate.

The corporate tax rate is $40\%.$ Calculate the cost of levered equity for SDR after the recapitalization. $($Assume perfect capital markets with taxes.$)$

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