WACC

Olsen Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $2 million of retained earnings with a cost of rs = 15%. New common stock in an amount up to $9 million would have a cost of re = 18%. Furthermore, Olsen can raise up to $4 million of debt at an interest rate of rd = 10% and an additional $3 million of debt at rd = 12%. The CFO estimates that a proposed expansion would require an investment of $3.6 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places.