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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 (aftertax) Weights

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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 (aftertax) Weights Plan A 5.0% 10.0 14.0 15% 10 75 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 5.2% 10.2 15.0 25% 9 9 9 65 6.0% 12.7 35% 10 8.6 8.0% 13.6 10.8 45% 10 45 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 Plan B Plan C Plan D a-2. Which of the four plans has the lowest weighted average cost of capital? O Plan A Plan B O Plan C Plan D

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