Kellwood Company is currently a levered firm. The company has a levered cost of equity of 12.84 percent and a pretax cost of debt of 6.4 percent. If the company is unlevered, its cost of capital will be 9.54%. Thetax rate is 25 percent. What is the company's current debt-equity ratio?

1.16

1.24

1.32

1.40

1.48