Schauffele Corporation operates as a manufacturer of heavy duty machinery used in the automotive industry. The company is publicly traded with 500,000 shares of stock outstanding, currently trading at a market price of $32 per share. The company has issued debt by selling 10,000 bonds with a coupon rate of 3.45%, annual payments, a remaining maturity of 8 years and a Face Value of $1,000. The bonds currently offer a Yield To Maturity of 3.60%. Schauffeles Beta is 1.24 and Tax Rate is 20%; the risk-free rate is 2.0% and the Market Risk Premium is 6.7%.

Schauffele is considering an acquisition of Varner, Inc., a privately-held firm that manufactures healthcare diagnostic equipment. Varner has 240,000 shares of stock with a book value of $3.50 per share and long term debt of $16,000,000. Varners top rival, a company that competes in every market against Varner and employs the same capital structure of 60/40 Debt/Equity as Varner, is publicly traded and has a Beta of 0.87; the competing company also has bonds trading in the market with a Yield To Maturity of 3.20%. Varners Tax Rate is 21%.

Calculate the Weighted Average Cost of Capital that Schauffele should use to discount the cash flows of Varner. Express your answer as a percentage rounded to two places (.34567 rounds to 34.57% for example).