Still in Modigliani-Miller Land, Thoughts and Prayers Industries has no long-term debt. Its cost of equity is 18%, and its marginal tax rate is 0.28 . Now the board of directors decides to change its capital structure such that the debt/equity ratio will become 1.2. The company can borrow at an interest rate of 7%. Approximately, what will the new cost of equity be? a. 17.5% b. 20% c. 22.5% d. 25% e. 27.5% f. Other, specify