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Sauer Milk Incorporated wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans: Cost (aftertax)
Sauer Milk Incorporated 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 4.0% 15% Preferred stock 8.0 10 Common equity 16.0 75 Plan B Debt 4.8% 25% Preferred stock 8.6 10 Common equity 13.0 65 Plan C Debt 5.0% 35% Preferred stock 17.7 10 Common equity 10.5 55 Plan D Debt 15.0% 45% Preferred stock 18.4 10 Common equity 12.6 45
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