LEA (the company you analyzed in Question 10) is considering the following change: The firm will recapitalize by setting the new D/V ratio to 0.40 (i.e. New D/V = 0.40). Cost of Debt (RD) will either increase or decrease by 0.25%, i.e. New RD = Old RD /- 0.25% (you have to figure out whether the recapitalization would lead to increase vs. decrease in RD)