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Sauer Milk Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans: Cost (aftertax)
Sauer Milk Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans: Cost (aftertax) Weights 6.0% 12.0 16.0 30% 20 50 6.5% 12.5 17.0 40% 20 40 Plan A Debt Preferred stock Common equity Plan B Debt Preferred stock Common equity Plan C Debt Preferred stock Common equity Plan D Debt Preferred stock Common equity 7.0% 20.7 14.8 45% 20 35 14.0% 21.2 16.5 50% 20 30 a-1. Compute the weighted average cost for four plans. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Weighted Cost Plan A 12.50% Plan B % Plan C % Plan D %
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