Dye industries currently uses no debt, but its new cfo is considering changing the capital structure to 40.0% debt (wd) by issuing bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure (wc) = 1 - wd. given the data shown below, by how much would this recapitalization change the firm's cost of equity, i. e., what is rl - ru?
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