Use the following information: - Debt $85,000,000 book value outstanding. The debt is trading at 85% of book value. The yjeld to maturity is 9%. - Equity: 3,500,000 shares selling at $52 per share. Assume the expected rate of return on Fderated'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 12.50%(D/N=0.1250). The pre-tax cost of debt 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. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places