Sunland chiropractic produces $300,000 of cash flow each year. The firm has no debt outstanding, and its cost of equity capital is 25%. The firms management would like to repurchase $600,000 of its equity by borrowing $600,000 at a rate of 10% per year. If we assume that the debt will be perpetual, find the cost of equity capital for Sunland after it changes its capital structure. Assume that Modigliani and Miller Proposition 1 assumptions hold.