I am confused about the D/E ratio in this question. Per the announcement, “Bema indicates that its debt/equity ratio will increase to 0.6 and its before-tax cost of debt will be 6%”. In the solution, they recalculate the D/E as 1/2.10 or 0.4762 for the purpose of calculating the cost of equity after the debt issuance. Does the debt/equity ratio increase twice as a result of a debt issuance? I feel like I am missing something obvious here.