OConnor Moving Co. is trying to estimate its optimal capital structure. Right now, OConnor has a capital structure that consists of 80 percent debt and 20 percent equity, based on market values. The risk-free rate is 4 percent and the market risk premium is 8 percent. Currently the companys cost of equity is 19 percent and its tax rate is 35 percent. What would be OConnors estimated cost of equity if it were to change its capital structure to 50 percent debt and 50 percent equity?

		10.9%
		21.3%
		8.2%
		19%