2 Question 22 (4 points) Costly Corporation is considering a new preferred stock issue. The preferred would have a par value of $700 with an annual dividend equal to 10.0 % of par. The 15 company believes that the market value of the stock would be $936.00 per share with flotation costs of $47.00 per share. The firm's marginal tax rate is 40 %. What is 18 the firm's cost of preferred stock? 8.66% 21 7.48% 7.87% 24 6.96% 6.31%