Dyson Inc. currently finances with $20\mathrm{.}0\%$ debt $($i$.$e$.,w_d=20\%),$ but its new CFO is considering changing the capital structure so $w_d=62\mathrm{.}5\%$ by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure $(w_c)=1-w_d.$ Given the data shown below, by how much would this recapitalization change the firm's cost of equity? Do not round your intermediate calculations. $($Hint: You must unlever the current beta and then use the unlevered beta to solve the problem.$)$

Risk$-$free rate, $r_{RF}$

Market risk prem, $R{P}_M$

Current beta, $b_{L1}$

$5\mathrm{.}00\%$ Tax rate, $T$

$6\mathrm{.}00\%$ Current $w_d$

$1\mathrm{.}60$ Target $w_d$

$25\%$

$20\%$

$62\mathrm{.}5\%$

Select one:

a$.9\mathrm{.}18\%$

b$.10\mathrm{.}93\%$

C$.11\mathrm{.}39\%$

d$.11\mathrm{.}48\%$

e$.9\mathrm{.}64\%$

Clear my choice