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

16.0

60

Plan B

Debt

6.6

%

35

%

Preferred stock

12.6

15

Common equity

17.0

50

Plan C

Debt

7.0

%

45

%

Preferred stock

19.7

15

Common equity

15.5

40

Plan D

Debt

17.0

%

55

%

Preferred stock

20.4

15

Common equity

17.6

30

(a-1)

Compute the weighted average cost for four plans. (Round your intermediate and final answers to 2 decimal places. Omit the "%" sign in your response.)

	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?

	Plan A
	Plan B
	Plan C
	Plan D

(b)

Among Plan C and Plan D, which has higher weighted average cost of capital.

	Plan C
	Plan D