Assignment:
Cost of preferred stock: Kresler Autos has preferred shares outstanding that pay annual dividends of $9 and the current price of the shares is $81. What is the after-tax cost of new preferred shares for Kresler if the flotation (issuance) costs for a new issue of preferred are 5 percent?
(Omit the percent sign in your answer. Carry out all calculations to four decimal places and round your final answer to two decimal places, for example 7.80%.)
After-tax cost of preferred shares %.