Barry's Ltd. is all equity financed with 18,000 shares outstanding and each share sells for $22. The EBIT of the company is $50,000. The company is debating of converting into a 40% debt capital structure, with 6% interest per annum. The cost of capital is currently 10%. Ignore taxes.   You are required to answer the following:   (d) What is the cost of equity in the levered company?  (e) What is the cost of capital of the levered company?

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