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ABC Corp is currently has a debt - to - enterprise value ratio of 2 0 % . Its current cost of equity is 1

ABC Corp is currently has a debt-to-enterprise value ratio of 20%. Its current cost of equity is 12% and its current cost of debt is 4%. The firm wants to permanently
change its financing policy to target a debt-to-enterprise value ratio of 42%. The cost of debt associated with this new financing policy will be 5%. Assuming perfect
markets, what will ABC's cost of equity be after it implements this new financing policy? Express your answer in percent and round to two decimals (do not include the %-
symbol in your answer).
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