Pico Cie. has no debt, an unlevered cost of equity of 12.4% and a tax rate of 40%. If the company chooses to change its capital structure to a total debt ratio of 50% (D/A=0.5), what is the new levered cost of equity?

a. 16.1%

b. 27.3%

c. 14.8%

d. 19.8%

e. There is not enough information to answer the question.