Friday Inc.'s perpetual preferred stock sells for $125.00 per share, and it pays an $9.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? Question 6 options:

a) 7.26% b) 8.72% c) 9.33% d) 8.64% e)