9. Warephase Corporation has preferred stock outstanding. The stock has a 12% dividend rate. The stocks market price is $80 per share, and its par value is $75. If new shares are issued, the firm will pay $2 per share in flotation costs. The corporate tax rate is 21%. What is the companys cost of preferred stock financing?

a) 10% c) 9.12% e) 11.54%

b) 12.5% d) 9.74%