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The Pizza Shoppe has debt with both a face and a market value of $ 5 , 5 0 0 and a market value of

The Pizza Shoppe has debt with both a face and a market value of $5,500 and a market value of equity of $8,800. The debt has a coupon rate of 7 percent and pays interest annually. The tax rate is 21 percent, and the unlevered cost of capital is 13 percent. What is the firm's cost of equity?
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19.25 percent
14.58 percent
15.96 percent
13.19 percent

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