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Strode Industries would like to figure out his firm's optimal debt level. The company has...

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Strode Industries would like to figure out his firm's optimal debt level. The company has $100 million in assets, which is financed with $30 million of debt and $ 70 million in equity. The risk-free rate, kry, is 4 percent, the market risk premium, KM - KRF, is 9 percent, and the firm's tax rate is 40 percent. Currently, the firm's cost of equity (ks) is 18.04 percent (determined on the basis of the CAPM). What would the firm's estimated cost of equity be if it were to change its capital structure from its present capital structure to 25 percent debt and 75 percent equity? 16.84 percent 14.61 percent O 15.49 percent O 18.04 percent O 17.40 percent

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