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Eilers Enterprises currently operates at its optimal capital structure that has debt four times the amount of equity and no preferred stock. Eilers' cost of

Eilers Enterprises currently operates at its optimal capital structure that has debt four times the amount of equity and no preferred stock. Eilers' cost of retained earnings is 14% and its corporate tax rate is 25%. Eilers needs to raise $15 million in additional capital for a new project and has hired you as a consultant to calculate the WACC for the last dollar of capital that will need to be raised for the new project. New common stock would have a cost of 15% and up to $10 million in debt would have a cost of 10%, with any additional debt having a cost of 12%. The firm will have $2 million in retained earnings. What is the WACC for the last dollar of capital that will need to be raised for the new project if Eilers wants to continue to operate at its optimal capital structure?

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