Company A is financed by four types of capital, i.e., debt, preferred stock, internal and

external equity financing. The financing rates (and respective weights) are as follows:

Debt: 2.35% (weight = 25%)

Preferred stocks: 3.75% (weight = 30%)

Internal equity: 5.75% (weight = 20%)

External equity: 6.00% (weight = 25%)

Based on this information, the weighted average cost of capital is:

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Company A is considering the issuance of a preferred stock at $200 market price. This preferred stock pays a fixed 15% dividend and there is an issuance cost of $6 per share. The par value is $100. Based on this information, the cost of raising capital with preferred stocks is: