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JKL is an all equity firm. Its current WACC is 10%. The company is thinking about borrowing some money to buy back some of its

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JKL is an all equity firm. Its current WACC is 10%. The company is thinking about borrowing some money to buy back some of its outstanding shares. It would borrow until the debt/equity ratio was 1.8. With that amount of debt its cost of debt capital would be 4%. What will be the expected return on the equity after the transaction is completed? O 10.00% 13.86% 20.80% 12.14%

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