Problem 2: Page 421 P9-7. Cost of preferred stock: ro=Dp+N, (16 points) Similar to P9-8 A. Calculate the cost of the preferred stock Solve for Dp - Par value x .08 = Solve for Np - Sales price - flotation costs - Then solve for rp = Dp / Np B. If the firm sell the preferred stock with a 10% annual dividend and nets $90.00 after flotation costs, what is its cost? Dp = 10 x par value Np - Solve for rp