Question 18 (5 points) Darryl Inc. currently finances with 20.0% debt (i.e., wd =20% ), but its new CFO is considering changing the capital structure so wd=60.0% by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure (wc)=1wd. Given the data shown below, by how much would this recapitalization change the firm's cost of equity? (Hint: You must unlever the current beta and then use the unlevered beta to solve the problem.) Risk-free rate: 3.00% Market risk premium: 6.00% Current beta: 1.15 Tax rate: 40% Current capital structure: 20% Debt/80\% Equity Target capital structure: 50% Debt /50% Equity (Multiple Choice) Excel Link: Excel Sheet.xIsx 2.70% 3.45% 4.50% 5.99% 3.95%