Q$.$ The Collection Co$.$ has a current beta of $1\mathrm{.}6.$ The market risk premium is $7$ percent and the risk$-$free rate of return is $3$ percent. By how much will the cost of equity increase if the company expands their operations such that their co mpany beta rises to $1\mathrm{.}9?$ Increase in cost of equity $=(1\mathrm{.}91\mathrm{.}6)\mathrm{.}07=2\mathrm{.}10$ percent