Lifter company uses a capital structure consists of 50% debt and 50% equity. Its cost of equity is 15% and cost of debt is 10%. It is now considering de-leveraging and change to a 30% debt and 70% equity capital structure. What would be its new cost of equity if we assume the cost of debt remains the same? Assume no taxes.

12.5%

13.57%

14.33%