q8/9

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 5.8% of the price paid by investors. What is the company's cost of preferred stock? 09.36% O 10.86% O 9.86% O 8.86% O 10.36% Assume that you are a consultant to Thornton Inc., and you have been provided with the following data: rRF = 4.9%; RPM = 5%; and b = 0.8. What is the cost of equity from retained earnings based on the CAPM approach? O 10.3% O 9.4% O 8.9% O 8.5% O 9.9%