ABC Company has publicly traded $1,000 par value, 5% semiannual coupon bonds which mature in 18 years. These bonds have a current market price of $1015. The company also has preferred stock with a $70 par and 5% annual dividend. The market has priced the preferred stock at $79. ABC's common stock has a beta of 1.6. You estimate the risk-free rate to be 3% and the required return on the market to be 13%. The company's average tax rate is 30%. What is the cost of the company's preferred stock? 5.6% 5.8% 5.3 4.4%