Question: Jackson, Inc. currently has a capital structure with D/A = 0.43 and its current cost of debt is 9%. If Pedestal modifies its capital structure

Jackson, Inc. currently has a capital structure with D/A = 0.43 and its current cost of debt is 9%. If Pedestal modifies its capital structure so that D/A changes to 0.34, its cost of debt will change to 6% and its new cost of equity will be 11%. What is Pedestal's current cost of equity? Assume perfect capital markets and, therefore, no taxes.

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