1. Evans Technology has the following capital structure: Debt 40% Common equity 60% The after-tax cost of debt is 6.5% The cost of preferred stock is 10% and the cost of common equity (in the form of retained earnings) is 13% a. What is Evans' WACC? b. An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50% debt and 50% equity. Under this new and more debt-oriented arrangement, the after cost of debt is 7%; the cost of common equity (in the form of retained earnings) is 15%. Recalculate the firm's WACC. Which plan is optional in terms of minimizing the WACC