9. An all equity firm has a cost of capital of 15 percent. The firm is considering switching to a debt-equity ratio of .65 with a pretax cost of debt of 7.5 percent. What will the firm's cost of equity be if the firm makes the switch? Ignore taxes. A. 11.25% B. 12.21% C. 16.67% D. 19.88% E. 21.38%

10. JL Lumber has a debt-equity ratio of .62. The firm's required return on assets is 12 percent and its current cost of equity is 15.60 percent. What is the firm's pretax cost of debt? Ignore taxes. A. 6.45% B. 6.03% C. 6.25% D. 6.40% E. 6.19%