Question: Please answer this! The answer is not 1 4 % Assuming a perfect world without taxes. Home Decor has a debt ratio (D/ V) of

Please answer this! The answer is not

14 %

Assuming a perfect world without taxes. Home Decor has a debt ratio (D/ V) of 2/5. The cost of equity is 14%, the cost of debt is 8%. The firm is considering increasing its leverage to a 2/3 debt ratio. What is the firm's cost of equity after the restructure? O 18.8% O 11.6%

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