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Olsen Outfitters Inc. believes that its optimal capital structure consists of 6 5 % common equity and 3 5 % debt, and its tax rate

Olsen Outfitters Inc. believes that its optimal capital structure consists of 65% common equity and 35% debt, and its tax rate is 25%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $3 million of retained earnings with a cost of rs =12%. New common stock in an amount up to $10 million would have a cost of re =15.0%. Furthermore, Olsen can raise up to $4 million of debt at an interest rate of rd =9% and an additional $6 million of debt at rd =12%. The CFO estimates that a proposed expansion would require an investment of $8.6 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places.
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