Your firm has a Return on Assets of $8\mathrm{.}50\%,$ the firm can issue debt at $3\mathrm{.}50\%$

regardless of the leverage, and the firm's marginal tax rate is $25\%.$ If the firm's

debt$-$to$-$asset ratio is $54\%,$ what is the Cost of Equity Capital within the $1963$

Miller & Modigliani framework?

$12\mathrm{.}90\%$

$10\mathrm{.}53\%$

$11\mathrm{.}88\%$

$15\mathrm{.}84\%$

$7\mathrm{.}27\%$