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What is company annual percentage cost of preferred stock

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Question - Maple Machinery, Ltd. strives to maintain a capital structure that includes 43% debt and 12% preferred stock. If the pre-tax cost of debt financing (kd) is 5.8% annually, the cost of common equity (ke) is 7.9% annually, the company's marginal income tax rate is 25%, and the weighted average cost of capital (kA or WACC) is 6.2295% annually, what is the company's annual percentage cost of preferred stock (kp) financing?

A. 1.50%

B. 14.11%

C. 0.80%

D. 8.93%

E. 6.70%

Reference no: EM132957122

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