Problem $11-20($Static$)$ Weighted average cost of capital $[$LO$11-1]$

Evans Technology has the following capital structure.

Debt $40\%$

Common equity $60$

The aftertax cost of debt is $6$ percent, and the cost of common equity $($in the form of retained earnings$)$ is $13$ percent.

What is the firm$$s weighted average cost of capital?

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.

An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is $50$ percent debt and $50$ percent equity.

Under this new and more debt$-$oriented arrangement, the aftertax cost of debt is $7$ percent, and the cost of common equity $($in the form of retained earnings$)$ is $15$ percent.

Recalculate the firm's weighted average cost of capital.

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.