Attempts Keep the Highest 0/10 6. Chapter Problem 10.10 (WACC), Section Problem 10.10 (WACC), Problem Problem 10.10 (WACC) Olsen Outfitters Inc. believes that its optimal capital structure consists of 55% common equity and 45% debt, and its tax rate is 25%. Olsen must raise addion capital to fund its upcoming expansion. The firm will have $1 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 $4 million of debt at an interest rate rd=11% and and expansion? Round your answer to two decimal places