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
Plan A
Debt		6.0	%		25	%
Preferred stock		12.0			15
Common equity		20.0			60
Plan B
Debt		6.2	%		35	%
Preferred stock		12.2			15
Common equity		17.0			50
Plan C
Debt		7.0	%		45	%
Preferred stock		16.7			15
Common equity		12.6			40
Plan D
Debt		14.0	%		55	%
Preferred stock		17.6			15
Common equity		14.6			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.) A._________ b._______ C.________ D._____________

a-2. Which of the four plans has the lowest weighted average cost of capital?

multiple choice

• Plan A

• Plan B

• Plan C

• Plan D