Question 22 (4 points) Costly Corporation is considering a new preferred stock issue. The preferred would have a par value of $500 with an annual dividend equal to 13.0% of par. The company believes that the market value of the stock would be $945.00 per share with flotation costs of $76.00 per share. The firm's marginal tax rate is 40%. What is the firm's cost of preferred stock? 5.81% 6.88% 8.22% 6.40% 7.48%