After completing her estimate of Templetons WACC, the CFO decided to explore the possibility of adding more low-cost debt to the capital structure. With the help of the firms investment banker, the CFO learned that Templeton could probably push its use of debt to 37.5% of the firms capital structure by issuing more debt and retiring (purchasing) the firms preferred shares. This could be done without increasing the firms costs of borrowing or the required rate of return demanded by the firms common stockholders. What is your estimate of the WACC for Templeton under this new capital structure proposal?