(2) Company BW has issued 35,000 preferred stocks. The par value is $100, dividend rate is 7.5%, and dividend is paid quarterly. Market price is $82 a share. Find the annual cost of preferred stock. [5 points]

3) Company BW has 100,000 shares outstanding and the market price is $25 per share. People believe this company is 1.8 times as risky as the stock market. Current T-bill rate is 2.5% and expected annual market risk premium is 9.1%. What is BWs annual cost of equity? [5 points]