Question 29) Assume we are in a Modigliani & Miller world without taxes, bankruptcy costs, and agency costs. Summerside Corp. (SC) is financed with equity capital only. SSC has an unlevered cost of capital of Ru = 15%. Suppose SSC issues debt and uses these proceeds to repurchases an equal amount of equity. What would be the likely effect of this recapitalization on SC's unlevered cost of capital? Select one: A) The unlevered cost of capital will increase. B) The unlevered cost of capital will increase and approach the cost of equity. C) The unlevered cost of capital will change, but the direction of the change depends on the equity beta. D) The unlevered cost of capital will decrease. E) The unlevered cost of capital will remain the same.