Situational Software Co. (SSC) is trying to establish its optimal capital structure. Its current capital structure consists of 40% debt and 60% equity; however, the CEO believes that the firm should use more debt. The risk-free rate, r_RF, is 3%; the market risk premium, RP_M, is 6%; and the firm's tax rate is 40%. Currently, SSC's cost of equity is 12%, which is determined by the CAPM.

What would be SSC's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity? Round your answer to two decimal places. Do not round intermediate steps.