Kims Specialized Cruises plans to issue preferred stock at a price of $20 per share. The par value is also $20 per share.

The annual dividend will be $2 per share, and issuance costs are expected to be $1.5 per share.

What is the cost of raising funds with preferred stock for Kim?

Group of answer choices

a. 10.81%

b. 8.72%

c. 9.76%

d. 8.00%