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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 Plan A 6.08 12.0 16.0 25% 15 60 Plan B 6.6% 12.6 17.0 35% 15 50 Debt Preferred stock Common equity Plan Debt Preferred stock Common equity Plan Debt Preferred stock Common equity Plan D Debt Preferred stock Common equity Fan c 7.08 19.7 15.5 45% 15 40 17.0% 20.4 17.6 55% 15 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.) Plan A Plan B Weighted Cost 12.40% 12.29% 8.29% 11.14% Plan C Plan D
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