Problem:
The preferred stock of CISO, Inc., pays an annual dividend of $6.50 a share and sells for $48 a share.
Required:
Question: What is CISO's cost of preferred stock?
a. 3.12%
b. 9.19%
c. 7.38%
d. 9.46%
e. 13.54%
Note: Provide support for rationale.