ABC Company tax rate is 25%, its beta is 1.10 and it used no debt. the cfo is considering moving to a capital structure with 30% debt and 70% equity. if the risk free rate is 5.0% and the market premium us 6.0% by how much would the capital structure shift change the firms cost of equity?

1.91

2.12

2.33

2.57

2.82