17. T-rex co. has zero debt and an overall cost of capital of 13.6 percent. The
firm is considering a new capital structure with 40 percent debt. The
interest rate on the debt would be 7 percent and the corporate tax rate is
21 percent. What would be the cost of equity with the new capital
structure?
(A) 16.89 percent
(B)16.15 percent
(C)17.08 percent
(D)17.26 percent
(E) 18.19 percent