Microsoft is considering changing its capital structure, in light of the tough business environment.

Microsoft is considering changing its capital structure, in light of the tough business environment.
Currently, MSFT’s total capital consists of:
$950 million in debt
$20 million in leased assets
$500 million of preferred stock
$900 million in common stock
$750 million in retained earnings

The debt coupon is 8% and tax rate is 40% while the current preferred share price is $96.20 and the dividends per share is $9.
The company's common stock is trading at $25.50, it's dividend payout this year is $1.15 the growth rate of the dividend is 8.5%.
Leases are at an average cost of 8%.

a. Find the weighted average cost of capital given the data above
b. If Microsoft wants to change its capital structure (i.e., lower their WACC), what should it do?