Business, 23.10.2019 01:00 ketricduggerp2ciuc

Olsen outfitters inc. believes that its optimal capital structure consists of 65% common equity and 35% debt, and its tax rate is 40%. olsen must raise additional capital to fund its upcoming expansion. the firm will have $3 million of retained earnings with a cost of rs = 15%. new common stock in an amount up to $9 million would have a cost of re = 18%. furthermore, olsen can raise up to $3 million of debt at an interest rate of rd = 11% and an additional $3 million of debt at rd = 14%. the cfo estimates that a proposed expansion would require an investment of $8.4 million. what is the wacc for the last dollar raised to complete the expansion? round your answer to two decimal places.

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