Cost of Preferred Stock The cost of preferted stock, f0 used in the weighted average cost of capital equation is cakulated as the prefered dividend, Dpr divided by the cutrent price of the tax deductible; so tax savings aro associated whth preterred stock. Quantitative Problemt Barton Industres can kesue perpetual prefened stock at a peice of 545 per ahare. The stock would pay a constant annual dividend of $3,00 per share. Hithe firm's macginal tax rate is 40%, what is the combany's cost of preferred stock? Round your amwer fo two decimai places