25. Company ABC started its business in the year 2000 as an all equity firm with an unlevered cost of capital 12%. In the year 2010 the company added debt in its capital structure with a total book value of $80M. Currently, in the year 2013 the company has a total market value of debt which is $5M less than the book value, selling at a par with a cost of debt 9%; The company is expecting an EBIT of $25M; if it pays a tax of 35% then what is the cost of equity (Re)? A) 14.66% B) 17.29% C) 18.27% D) 12.19% E) None of the above