MC Qu. 56 Grill Works and More has...

Grill Works and More has 5 percent preferred stock outstanding that is currently selling for $42 a share. The stock's par value is $100. The market rate of return is 8 percent and the firm's tax rate is 34 percent. What is the firm's cost of preferred stock?

	10.82 percent
	7.85 percent
	9.78 percent
	7.14 percent
	11.90 percent