Rivoli is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with $40\%$ debt based on market values, its cost of equity, rs$,$ will increase to $12\%$ to reflect the increased risk. Bonds can be sold at a cost, rd$,$ of $9\%.$ Based on the new capital structure, what is the new weighted average cost of capital? Round your answer to three decimal places.