Klieman Company's perpetual preferred stock sells for $$88$ per share and pays a

$$9$ annual dividend per share. If the company were to sell a new preferred issue,

it would incur a flotation cost of $5\mathrm{.}8\%$ of the price paid by jnvestors. What is the

company's cost of preferred stock?

$8\mathrm{.}86\%$

$10\mathrm{.}86\%$

$9\mathrm{.}86\%$

$9\mathrm{.}36\%$

$10\mathrm{.}36\%$