Back to Assignment Attempts Average / 1 10. Problem 10.10 (WACC) eBook Olsen Outfitters Inc. believes that its optimal capital structure consists of 70% common equity and 30% debt, and its tax rate is 25%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $1 million of retained earnings with a cost of rs = 11%. New common stock in an amount up to $6 million would have a cost of re = 12.5%. Furthermore, Olsen can raise up to $4 million of debt at an interest rate of ra = 11% and an additional $3 million of debt at ra = 13%. The CFO estimates that a proposed expansion would require an investment of $6.4 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