Fireworks, Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans:

	Cost (aftertax)	Weights
Plan A
Debt................................	5.0%	20%
Preferred stock................	10.0	10
Common equity...............	14.0	70
Plan B
Debt................................	5.5%	30%
Preferred stock................	10.5	10
Common equity...............	15.0	60
Plan C
Debt................................	6.0%	40%
Preferred stock................	10.7	10
Common equity...............	15.8	50
Plan D
Debt................................	8.0%	50%
Preferred stock................	11.2	10
Common equity...............	17.5	40

a. Which of the four plans has the lowest WACC? (Round to two places after decimal.)

b. Briefly discuss the results from Plan C & Plan D, and why one is better than the other.