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ABC Company is an unlevered firm with a beta of 1.05. If the firm changes its capital structure so that the amounts of debt and

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ABC Company is an unlevered firm with a beta of 1.05. If the firm changes its capital structure so that the amounts of debt and equity are equal, what will ABC's new cost of equity be? Assume a 5.75% risk-free rate, a 7 25% equity risk premium, and a tax rate of 30%. a) 18.69% b) 22.05% c) 13.36% d) 14.02%

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