What will happen if risk-free interest rates rise and the required return on equity does not change?

A feature of OECD countries today is that the required return on equity is significantly higher than the actual return on corporate capital. To obtain th is very high required return on equity, companies use debt leverage, which is easy and effective in an environment of very low interest rates. But what would happen if interest rates rose in the future and the required return on equity remained very high? Companies could use even higher debt leverage . But this is hard to imagine if interest rates were higher; If debt leverage is not used more, the only remaining option for companies to “boost” the economic return on their capital would be to skew income distribution even further against wage earners and to offshore even more to countries with low labour costs. So there would be even more “neoliberal capitalism” if a rise in interest rates prevented the use of debt leverage to achieve the target return on equity.