Thunderhorse Oil. Thunderhorse Oil is a U.S. oil company. Its current cost of debt is 6.70%, and the 10 -year U.S. Treasury yield, the proxy for the risk-free rate of interest, is 3.70\%. The expected return on the market portfolio is 8.50%. The company's effective tax rate is 40%. Its optimal capital structure is 35% debt and 65% equity. a. If Thunderhorse's beta is estimated at 0.70 , what is Thunderhorse's weighted average cost of capital? % (Round to two decimal places.)