Byling Software Co. is trying to establish its optimal capital structure. Its current capital structure consists of 25% debt and 75% equity. The risk-free rate, is 5%; the market return, is 11%; and the firms tax rate is 40%. Currently, Bylings cost of equity is 14%, which is determined by the CAPM. What would be Cyclones estimated cost of equity if it changed its capital structure to 50% debt and 50% equity?

a) 16%

b) 14.5%

c) 17%

d) 18%