Simon Software Co. is trying to estimate its optimal capital structure. Right now, Simon has a capital structure that consists of 30% debt and 70% equity, based on market values. The risk-free rate is 5% and the market risk premium, RMRr, is 5%. Currently the company's cost of equity, which is based on the CAPM, is 12% and its tax rate is 40%. What would be Simon's estimated cost of equity if it were to change its capital structure to 70% debt and 30% equity? (Hint: a firm's beta is a function of its leverage)