The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolan's current capital structure calls for $40$

percent debt, $20$ percent preferred stock, and $40$ percent common equity. Initially, common equity will be in the form of retained

earnings $(K_e)$ and then new common stock $(K_n).$ The costs of the various sources of financing are as follows: debt $($after$-$tax$),6\mathrm{.}5$

percent; preferred stock, $12$ percent; retained earnings, $10$ percent; and new common stock, $11\mathrm{.}2$ percent.

a$.$ What is the initial weighted average cost of capital? $($Include debt, preferred stock, and common equity in the form of retained

earnings, $K_e.)$

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.