If the levered beta when all equity financed is 1.4, the risk free rate is 3.5%, the expected risk on the stock market is 8%, and the company levers up $248mm in debt and the current level of equity -- what would the cost of equity be at that point?

Exhibit A: Yield to maturity on debt: 8.0% Original market value of debt: $100 million Number of shares of common stock: 10 million Market price per share of common stock: $30 Cost of capital if all equity-financed: 10.3% Marginal tax rate: 35%

Exhibit B:

Debt-to-Total Capital Ratio	Cost of Debt	Cost of Equity
20%	6%	13%
30%	8%	13%
40%	10%	14.8%
50%	10%	18%