ABC software is trying to establish its optimal capital structure. It currently has 30% debt and 70% equity.

However, the firm CEO believes that the firm should use more debt. The risk-free rate is 3% and the market risk premium is 5%.

The firm's tax rate is 35% and the cost of equity is 10%, as determined by the CAPM.

Assume that the firm changed its capital structure to 40% debt and 60% equity.

How much should be the new cost of equity for this company?

Enter your answer in the following format: 0.1234;

Hint #1: Answer is between 0.0944 and 0.1291