Simon Software Co. is trying to estimate its optimal capital structure. Right now, Simon has a capital structure that consists of 20 percent debt and 80 percent equity. The risk-free rate is 6 percent and the market risk premium is 5 percent. Currently, the companys cost of equity is 14 percent and its tax rate is 40 percent. What's the unlevered cost of equity?

Question 13 options:

	11.44%
	11.66%
	11.88%
	12.95%
	11.22%

What's the levered beta if the company were to change its capital structure to 50 percent debt and 50 percent equity?

What would be the levered cost of equity with 50 percent debt and 50 percent of equity?