You start a business you expect to generate a year$-$end cash flow of $$145,000.$ An equity investor offers you $$120,000$ for the business at the beginnig of the year. What is the cost of unleveraged equity?

From above, you decide to finance the business with $$45,000$ of debt at $7\%$ interest. The tax rate is $20\%,$ and the targeted capital structure ratio is $\frac{37\mathrm{.}5}{62\mathrm{.}5}.$ What is the leveraged cost of equity?