The preferred stock of Gator Industries sells for $34.59and pays $2.71per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 494000more preferred shares just like the ones it currently has outstanding, it could sell them for $34.59a share but would incur flotation costs of $3.19per share. What are the flotation costs for issuing the preferred shares and how should this cost be incorporated into the NPV of the project being financed?

1.The flotation costs adjusted initial outlay for issuing the preferred shares are $

2.How should this cost be incorporated into the NPV of the project being financed?(Select the best choice below.)

A.We can account for flotation costs when calculating NPV by adding them to the initial project outlay.

B.We can account for flotation costs when calculating NPV by issuing more shares than initially anticipated.

C.We can account for flotation costs when calculating NPV by adjusting the project's discount rate.

D.We can account for flotation costs when calculating NPV by subtracting them from the initial project outlay.