Firm cost of new preferred shares

Question

Problem:

A new issue of preferred stock will pay a quarterly dividend of $2.50 and will sell for $75. Flotation costs will be $4.00 per share.

Required:

Question: What firm's cost of new preferred shares?

• 3.3%
• 13.3%
• 14.1%
• 15.4%

Note: Please show guided help with steps and answer.