WorldTrans currently finances with 20.0% debt (i.e., w d = 20%), but its new CFO is considering changing the capital structure so w d = 62.5% by issuing additional bonds and using the proceeds to...

WorldTrans currently finances with 20.0% debt (i.e., w_d
= 20%), but its new CFO is considering changing the capital structure so w_d
= 62.5% by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure (w_c) = 1 – w_d. Given the data shown below, by how much would this recapitalization change the firm's cost of equity? Do not round your intermediate calculations. (Hint: You must unlever the current beta and then use the unlevered beta to solve the problem.)