Use the following information: - Debt: $65,000,000 book value outstanding. The debt is trading at 86% of book value. The yield to maturity is 9%. - Equity: 1,500,000 shares selling at $32 per share. Assume the expected rate of return on Federated's stock is 18%. - Taxes: Federated's marginal tax rate is Tc=0.21. Suppose Federated Junkyards decides to move to a more conservative debt policy. A year later, its debt ratio is down to 17.50% (D) 0.1750). The interest rate has dropped to 8.6%. The company's business risk, opportunity cost of capital, and tax rate have not changed. Use the three-step procedure to calculate Federated's WACC under these new assumptions. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)