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Olympic Lanes is currently worth 5 million dollars and is all equity - financed. The company's current cost of equity is 9 % Olympic Lanes

Olympic Lanes is currently worth 5 million dollars and is all equity-financed. The company's current cost of equity is 9% Olympic Lanes would like to issue debt worth 2 million dollars with a cost of debt of 5%. Assuming the Modigliani-Miller Theories hold perfectly, what will Olympic Lanes' new cost of equity be after issuing the debt?

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