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The Eglon store is an all-equity firm with an after tax income of $160,000. The unlevered...

The Eglon store is an all-equity firm with an after tax income of $160,000. The unlevered cost of equity is 12% and the tax rate is 34%. The store is considering using $250,000 in bonds at par with a 6.5% annual coupon. What is the levered cost of equity?

A) 8.8%

B) 9.13%.

C) 9.41%

D) 12.78%

E) 10.63%

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