6. Problem 10.10 (WACC and Percentage of Debt Financing) eBook Olsen Outfitters Inc. believes that its optimal capital structure consists of 70% common equity and 30% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $4 million of retained earnings with a cost of rs = 10%. New common stock in an amount up to $8 million would have a cost of re = 11.0%. Furthermore, Olsen can raise up to $4 million of debt at an interest rate of ra = 11% and an additional $6 million of debt at rs = 15%. The CFO estimates that a proposed expansion would require an investment of $7.3 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places