7. please show work thank you.

Bulterite has come up with the following capital structure which management belleven is optima Debt Preferred stock Common stock 40 10% SON Bonds: Builtrite is planning on offering a $1000 par value, 20 year, 8% coupon bond with an expected selling price of 7025 Flotation costs would be $55 per bond. Preferred Stock: Builtrite could sell a $46 par value preferred with an 8% coupon for $40 a share. Flotation costs would be $2a share Common stock: Currently, the stock is selling for $62 a share and has paid a $2.82 dividend. Dividends are expected to continue growing at 10%. Flotation costs would be $3.75 a shore and Bultrite has $350,000 in available retained earnings Assume a 40% tax bracket What is the after-tax cost of preferred stock? 5.81% 11.50% 9.68% 8.76%