Whispering Pines, Inc., is all-equity-financed. The expected rate of return on the companys shares is 14.55%.

The opportunity cost of capital for an average-risk Whispering Pines investment is 14.55%

Suppose the company issues debt, repurchases shares, and moves to a 34% debt-to-value ratio (D/V = .34). What will be the companys weighted-average cost of capital at the new capital structure? The borrowing rate is 9.85% and the tax rate is 35%.

Find the weighted-average cost of capital.