AAA Corporation and BBB Corporation are identical in every way except their capital structures. AAA Corporation, an all-equity firm has 50 million shares of stock outstanding, currently worth $35 per share. BBB Corporation uses leverage in its capital structure. The market value of BBB's debt is $200million and its cost of debt is 8.7 percent. Each firm is expected to have earnings before interest and tax of $250 million in perpetuity. Assume that every investor can borrow at 8.7 percent per year. Corporate tax rate is 35%. Q19. What would be the BBB's cost of equity? 8.9396 9.41% 9.33% 8.79 9.29%