Firm Z has zero debt and a Beta of 0.95. The risk-free rate is 3.7% and the expected return on the market is 11.1%. Firm Z decides to increase its debt ratio to 20% at a cost of the risk-free rate, 3.7%. The tax rate is 25%. Calculate the leveraged cost of equity of the newly indebted firm. 12.05% 12.14% 11.66% 11.93%