Suppose that a firm firm currently has no debt but is planning on issuing $$4\mathrm{.}0M$

in corporate bonds to finance a major expansion. The expected cost of debt is

$5\mathrm{.}5\%.$ The firm currently has $$9$ in equity. If the firm goes ahead with the planned

debt issuance, what do you expect the firm's cost of equity. to be$?$ You can

assume that the firm currenthly has a cost of capital of $10\mathrm{.}5\%,$ and a tax rate of

$20\%.$

The answer should be given in decimal form with three decimals $($e$.$g$.,$ if the

answer is $6\mathrm{.}1\%$ then write $0\mathrm{.}061)$