EXAMPLE 14.3 Alabama Power Co.'s Cost of Preferred Stock On May 30, 2008, Alabama Power Co. had two issues of ordinary preferred stock with a $25 par value that traded on the NYSE. One issue paid $1.30 annually per share and sold for $21.05 per share. The other paid $1.46 per share annually and sold for $24.35 per share. What is Alabama Power's cost of preferred stock