6. Chapter Problem 10.10 (WACC), Section Problem 10.10 (WACC), Problem Problem 10.10 (WACC) eBook Olsen Outfitters Inc. believes that its optimal capital structure consists of 65% common equity and 35% debt, and its tax rate is 25%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $2 million of retained earnings with a cost of rs = 10%. New common stock in an amount up to $7 million would have a cost of re = 11.5%. Furthermore, Olsen can raise up to $2 million of debt at an interest rate of ra = 10% and an additional $6 million of debt at ra = 11%. The CFO estimates that a proposed expansion would require an investment of $4.6 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places. % Grade it Now Save & Continue Continue without saving