The entrepreneur uses debt in the investment project. investment project. The value of debt today is 375$ and the interest on the debt over the next year is 5%. The initial value of levered equity is 835$. The value of the levered equity is 1544.75$ in the good state and 542.75$ in the bad state. The probability of being in the good state is 40%. Assume perfect capital markets. 1) What is expected return on levered equity and debt?