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Use the following information:Debt: $69,000,000 book value outstanding. The debt is tradingat 95% of book value. The yield to maturity is 10%.Equity: 1,900,000 shares selling at $36 per share. Assume theexpected rate of return on Federated’s stock is 19%.Taxes: Federated’s marginal tax rate is Tc= .35.Suppose Federated Junkyards decides to move to a moreconservative debt policy. A year later its debt ratio is down to16.50% (D/V = .165). The interest rate has dropped to9.6%. The company’s business risk, opportunity cost of capital, andtax rate have not changed.Use the three-step procedure to calculate Federated’s WACC underthese new assumptions. (Do not round intermediatecalculations. Enter your answer as a percent rounded to 2 decimalplaces.)Weighted-average cost of capital %