5. Henderson, Inc. has expected earnings of $1,180,000 and a market value of equity of $12,400,000. The firm is planning to issue $4,700,000 of debt at 6 percent interest and use the proceeds to repurchase shares at their current market value. Ignore taxes. What will be the cost of equity after the repurchase?

	a	11.66%
	b	11.47%
	c	11.25%
	d	11.02%
	e	10.88%