A firm currently has a debt-equity ratio of 1/3. The debt, which is virtually riskless, pays an interest rate of 7.3%. The expected rate of return on the equity is 12%. What would happen to the expected rate of return on equity if the firm reduced its debt-equity ratio to 1/4? Assume the firm pays no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Expected rate of return ratio: %