The preferred stock of Orange Co. pays an annual dividend of $5.25 a share and sells for $60 a share. What is the firm's cost of preferred stock?

Group of answer choices

6.76 percent

8.75 percent

9.14 percent

7.18 percent

Raspberry Company is financed by $4 million in debt, $1 million in preferred stocks, and $5 million in common stocks. The pre-tax cost of debt is 4%, the cost of preferred stock is 6%, and the cost of equity is 12%. Calculate the weighted average cost of capital. Assume 21% tax rate.

Group of answer choices

9.29%

8.26%

7.86%

6.60%