Part II $($WACC estimation$)$: Use the following information to answer questions $5$ to $10.$

Waffle Corporation is estimating its WACC. Its target capital structure is $30$ percent debt, $20$ percent preferred stock, and $50$ percent common equity. Its bonds have a $10$ percent coupon, paid semiannually, a current maturity of $20$ years, and sell at par of $$1,000.$ The firm can sell, at par $($ $$100),$ preferred stock which pays a $9\mathrm{.}5$ percent annual dividend, but flotation costs of $5$ percent of the proceeds would be incurred. Waffle's beta is $1\mathrm{.}5,$ the Treasury bond yield is $5$ percent, and the market risk premium is $6$ percent. Waffle is a constant$-$growth firm which just paid a dividend of $$2\mathrm{.}00,$ sells for $$55\mathrm{.}00$ per share of common equity, and has a growth rate of $10$ percent. The firm's policy is to use a risk premium of $4$ percentage points when using the bondyield$-$plus$-$risk$-$premium method to find the cost of common equity $(r_s).$ The firm's marginal tax rate is $25$ percent.

$(6)$ What is Waffle's cost of preferred stock?