The only market imperfection comes from the presence of corporate taxes, and that the corporate tax rate is 25%. A firm has beta of equity of 0.6 and a debt-to-value ratio of 45%. The firms current credit rating is B, which corresponds to a debt beta of 0.25. The CFO plans to reduce the debt-to-value ratio to 20%, which should improve its credit rating. The CFO expects that after the leverage reduction, its credit rating will be BBB, which corresponds to a debt beta of 0.1. If the risk free rate is 5%, and the market risk premium is 8%, what is the expected return on equity before and after the change in leverage?