XYZ Corp. is considering an investment in Project Maverick. This new project requires a $$11,000,000$ initial investment and will produce annual net after tax cash flows according to the following pro forma:

This project will be financed internally. The project is as risky as the firm$$s current operations. The market values of the firm$$s equity and debt are $$56$ million and $$44$ million respectively.$xYZ$ Corp. is considering an investment in Project Maverick. This new project requires a

$$11,000,000$ initial investment and will produce annual net after tax cash flows according to the

following pro forma:

This project will be financed internally. The project is as risky as the firm's current operations. The

market values of the firm's equity and debt are $$56$ million and $$44$ million respectively.

$1.$ Using the CAPM method, calculate the cost of equity.