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An all equity firm has a cost of capital of 10 percent. The firm is considering switching to a debt-equity (D/E) ratio of 1.20 with

An all equity firm has a cost of capital of 10 percent. The firm is considering switching to a debt-equity (D/E) ratio of 1.20 with a pretax cost of debt of 6.4 percent. What will the firm's cost of equity be if the firm makes the switch? Ignore taxes.

		13.36%
		14.32%
		14.80%
		15.28%
		15.73%

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