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A company has an issue of preferred stock outstanding, with a current market price of $74 per share. If the stock pays a dividend of

A company has an issue of preferred stock outstanding, with a current market price of $74 per share. If the stock pays a dividend of 3% per share (based on a par value of $100), what is the company's current cost of preferred stock?

A. 3.00%
B. 4.05%
C. 2.22%
D. 3.74%

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