Bepsi Cola pays 8 percent annually on its debt which has a market value of $5,840. The unlevered cost of capital is 14 percent. The expected earnings before interest and taxes are $1,400. What is Bepsi Cola's levered cost of equity if the tax rate is 35 percent?

a.

25.14 percent

b.

23.59 percent

c.

22.42 percent