ABC Company has publicly traded $1,000 par value, 7% 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 $75 par and 8% annual dividend. The market has priced the preferred stock at $104. ABC's common stock has a beta of 1.5. You estimate the risk-free rate to be 4% and the required return on the market to be 15%. The company's average tax rate is 30%. What is the cost of the company's preferred stock? 5.77% 6.61% 4.98% 5.32%