Question: Stoddard Datsun Restorations ( SD ) is an all - equity firm, that expects free cash flows of $ 4 5 0 , 0 0

Stoddard Datsun Restorations (SD) is an all-equity firm, that expects free cash flows of $450,000 per year in perpetuity. The cost of unlevered equity is 12%. SDR is considering a recapitalization, where it would issue $750,000 in debt at a 6% interest rate.
The corporate tax rate is 40%. Calculate the cost of levered equity for SDR after the recapitalization. (Assume perfect capital markets with taxes.)
please answer it step by step with the actual calculations

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