4. Sauer Milk, Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans: Cost (after-tax) Weights Plan A Debt Preferred stock Common equity 5.0% 10.0 14.0 20% 10 70 Plan B Debt Preferred stock Common equity 5.5% 10.5 15.0 30% 10 60 Plan C Debt Preferred stock Common equity 6.0% 10.7 15.8 40% 10 50 I lid Plan D Debt Preferred stock Common equity 8.0% 11.2 17.5 50% 10 40 a. Which of the four plans has the lowest weighted average cost of capital? (Round to two places to the rigl: of decimal point.) (16 points) Plan A 5.0% Preferred stock 10.0 Common equity Debt 20% 10 70 se 14.0 5.5% Plan B Debt Preferred stock Common equity 10.5 15.0 30% 10 60 Plan C Debt Preferred stock Common equity 6.0% 10.7 15.8 40% 10 50 I Plan D Debt Preferred stock Common equity 8.0% 11.2 17.5 50% 10 40 b. Briefly discuss the results from Plan C and Plan D, and why one is better than the other (3 points)