Dyson Inc. currently finances with 20.0% debt (i.e., wd= 20%), but its new CFO is considering changing the capital structure so wd= 36.0% by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure (wc) = 1 - wd. 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, rRF

5.00%

Tax rate, T

40%

Market risk prem, RPM

6.00%

Current wd

20%

Current beta, bL1

1.65

Target wd

36.0%