Problem $18-4$ WACC Use the following information: $-$ Debt: $\backslash (\backslash$$ $71,000,000\backslash )$ book value outstanding. The debt is trading at $\backslash (93\backslash \%\backslash )$ of book value. The yield to maturity is $\backslash (7\backslash \%\backslash ).-$ Equity: $\backslash (2,100,000\backslash )$ shares selling at $\backslash (\backslash$$ $38\backslash )$ per share. Assume the expected rate of return on Federated's stock is $\backslash (16\backslash \%\backslash ).-$ Taxes: Federated's marginal tax rate is $\backslash ($ T$\_\{$c$\}=0\mathrm{.}21\backslash ).$ Suppose Federated Junkyards decides to move to a more conservative debt policy. A year later, its debt ratio is down to $\backslash (16\mathrm{.}00\backslash \%\backslash )(\backslash ($ D $/\backslash$mathrm$\{$V$\}=\backslash )0\mathrm{.}1600).$ The pre$-$tax cost of debt has dropped to $\backslash (6\mathrm{.}6\backslash \%\backslash ).$ The company's business risk, opportunity cost of capital, and tax rate have not changed. Use the three$-$step procedure to calculate Federated's WACC under these new assumptions. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places. Answer is complete but not entirely correct.