Question $10(1$ point$)$

Klose Outfitters Inc. believes that its optimal capital structure consists of $70\%$ common equity and $30\%$ debt, and its tax rate is $35\%.$ Klose must raise additional capital to fund its upcoming expansion. The firm will have $$300,000$ of retained earnings with a cost of $15\%.$ New common stock in an amount up to $$6$ million would have a cost of $20\%.$ Furthermore, Klose can raise up to $$250,000$ of debt at an interest rate of $6\%$ and an additional $$6$ million of debt at $8\%.$ The CFO estimates that a proposed expansion would require an investment of $$1,900,000.$ What is the WACC for the last dollar raised to complete the expansion?

$15\mathrm{.}56\%$

$8\mathrm{.}10\%$

$11\mathrm{.}67\%$

$12\mathrm{.}06\%$