Lauterbach Corporation uses no debt,has a beta of 1.10,and its tax rate is 40%.However,the CFO is considering moving to a capital structure with 30% debt and 70% equity.The risk-free rate is 5.0% and the market risk premium is 6.0%.By how much would the firm's cost of equity change as a result of altering its capital structure?
A)1.53%
B)1.70%
C)1.87%
D)2.05%

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The Answer of Lauterbach Corporation uses no debt,has a beta of 1.10,and its tax rate is 40%.However,the CFO is considering moving to a capital structure with 30% debt and 70% equity.The risk-free rate is 5.0% and the market risk premium is 6.0%.By how much would the firm's cost of equity change as a result of altering its capital structure?
A)1.53%
B)1.70%
C)1.87%
D)2.05%

Lauterbach Corporation Uses No Debt,has a Beta of 1