A companys common stock and debt have market values of $70 million and $30 million, respectively. Investors currently require a 16% return on the equity and an 8% return on the debt. If the company issues an additional $10 million of common stock and uses the proceeds to retire debt, what is the expected return on the stock?

Assume that the retirement does not affect the interest rate on the remaining debt and that the company pays no taxes.