Blues, Inc., is an MNC located in the United States. Blues would like to estimate its weighted average cost of capital $($WACC$).$ On average, bonds issued by Blues yield $14$ percent. Currently, Treasury security rates are $1$ percent. Furthermore, Blues' stock has a beta of $1\mathrm{.}5,$ and the return on the Wilshire $5000$ stock index is expected to be $12$ percent. Blues' target capital structure is $40$ percent debt and $60$ percent equity. If Blues is in the $35$ percent tax bracket, what is its weighted average cost of capital? Do not round intermediate calculations. Round your answer to two decimal places.

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