Fritz Industries plans to issue a $100 par perpetual preferred stock with a fixed annual dividend of 12 percent of par. It would sell for $96.60, but flotation costs would be 10 percent of the market price, making the net price $86.94 per share. What is the percentage cost of preferred stock after taking flotation costs into account? O a. 16.01% O b. 11.18% O c. 12.42% O d. 12.13% O e. 13.80% QUESTION 10 Hilliard Corporation estimates that it can issue debt at a rate of r d = 10%, and its tax rate is 25 percent. It can issue preferred stock that pays a constant $5.50 dividend per year at a price of $55 per share. Also, its common stock currently sells for $42 per share, the next expected dividend (D 1) is $2.94, and the dividend is expected to grow at a constant rate of 6 percent per year. The target capital structure consists of 65 percent common stock, 25 percent debt, and 10 percent preferred stock. What is Hilliard's WACC? O a. 11.95% O b.8.96% O c. 11.60% O d. 7.43% O e. 11.33%