Chelsea Corporation's cost of equity is $16\%$ and it is $100\%$ equity financed. If it can borrow enough money at $10\%$ to buy back half of its stock, what would would happen to the cost of equity be under the original assumptions of the Modigliani and Miller Capital Structure Theorem.

It would fall to $11\%$

It would remain at $16\%$

It would rise to $19\%$

It would rise to $22\%$

It would fall to $13\%$