One of your new employees notes that your debt has a lower cost

of capital $(7\%)$ than your equity $(16\%).$So$,$ he suggests that

the firm swap its capital structure from $27\%$ debt and $73\%$ equity

to $73\%$ debt and $27\%$ equity instead. He estimates that after the$$

swap, your cost of equity would be $21\%.$ a$.$ What would be your new

cost of$$ debt? Make your calculations based on your$$ firm's pre$-$tax

WACC. b$.$ Have you lowered your overall cost of$$ capital?