4. The cost of preferned stock Firms that carry preferred stock in their capital mix want to not only distribute dividends to common stockholders but also maintain credibrity in the capital markets so thet they can raise additional funds in the future and avoid potential corporate raids from preferred stockholders. Consider the case of Happy tion Manulacturing Inc. Hapey tion Manubacturing the, has prelerred steck that pays a dividend of $7 per share and sells for $100 per share. It is conclering issuing new shares of preferred stock, These new shares incur an underwriting (or flctation) coct of 2.7\%. How much will Happy tien Manulacturing Ine. pay per share to the underwiter? 42.97 per chare 487.57 per share $97,30 per share $2,70 per share How much will Happy tion Manufacturing Inc. pay per share to the underwriter? \$2.97 per share $37.57 per share $97.30 per share $2.70 per share Based on this information, what is Happy Uion Manufacturing Incis cost of prefered stock capitil? 5.75%6 6. 8393 7.91% 7.19% Compainises make thx adjvstimants whicn colculating the (oftentix) cost of preferred stockbcelse prefered dividends tex deductible, oo the company bears their full cost