Tesla Inc, a U.S. company, is considering changing its capital structure. The company has debt and equity in its capital structure and the current D/E ratio is 0.35, the current weighted average cost of capital of Tesla is 10.44% p.a. The current before-tax cost of debt capital for Tesla is 10% p.a., the current cost of equity is 11.65% p.a. and current equity beta is 0.95. The risk-free rate and market risk premium are 5% p.a. and 7% p.a. respectively. The corporate tax rate is 30%. If the company switches to a capital structure with 100% equity, which of the following is closest to the new weighted average cost of capital of Tesla Inc (using the approach covered in the lecture)? 9.15% p.a. 10.34% p.a. 10.44% p.a. O 11.05% p.a. 12.06% p.a