If TJ Enterprises' stock price were to rise such that t sold at 1.5 times its book value, causing the cost of equity to fall to 13 percent, what would be the firm's cost of capital (assuming the cost of debt and tax rate do not change).

GIVEN INFO BELOW:

John managers estimate that the market requires a 15 percent return on its common stock, the firm's command a yield to maturity of 8 percent, and the firm faces a tax rate at 34 percent. Cash $54,000 Accounts Receivable 458,000 Inventories 740,000 Long-term Debt $1,259,000 Net Property, Plant & 1,895,500 Common Equity 1,888,500 Equipment Total Assets $3,147,500 $3,147,500 Cost of debt financing Cost of equity Tax rate Market to book ratio 8% 15% 34% John managers estimate that the market requires a 15 percent return on its common stock, the firm's command a yield to maturity of 8 percent, and the firm faces a tax rate at 34 percent. Cash $54,000 Accounts Receivable 458,000 Inventories 740,000 Long-term Debt $1,259,000 Net Property, Plant & 1,895,500 Common Equity 1,888,500 Equipment Total Assets $3,147,500 $3,147,500 Cost of debt financing Cost of equity Tax rate Market to book ratio 8% 15% 34%