Gulf Coast Tours Currently Has a Weighted Average Cost of Capital

Gulf Coast Tours currently has a weighted average cost of capital of 11.3 percent based on a combination of debt and equity financing.The firm has no preferred stock.The current debt-equity ratio is 0.58 and the aftertax cost of debt is 6.4 percent.The company just hired a new president who is considering eliminating all debt financing.All else constant,what will the firm's cost of capital be if the firm switches to an all-equity firm?

A) 10.45 percent
B) 12.62 percent
C) 12.89 percent
D) 13.37 percent
E) 14.32 percent