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

Plan A	COST(After tax)	Weights
Debt	7.0%	20.%
Preffered stock	14.0	10
Common Equity	18.0	70
Plan B
Debt	7.8%	30%
Preferred Stock	14.8	10
Common equity	19.0	60
Plan C
Debt	8.0%	40%
Preferred stock	14.7	10
Common equity	9.5	50
Plan D
Debt	12.0%	50%
Preferred stock	15.4	10
Common equity	11.8	40

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

Plan C

Plan D

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

b. What is the relationship between the various types of financing costs and the debt-to-equity ratio?

-All types of financing costs increase as the debt-to-equity increases.

-All types of finacing costs decrease as the debt-to-equity ratio increases.