$2.$ XYZ company can raise also preferred equity capital by issuing preferred shares at the price of $$100$ per share. It will have to set as an annual preferred dividend for these shares $59$ per share. Upon issuance of these preferred shares, a one$-$time flotation cost of $53$ per share will be incurred. There is a question of whether dividends are tax$-$deductible. The tax rate of the firm is $33$ percent. What is the cost of preferred equity capital for this firm?