36 Donaldson Corp. has preferred stock outstanding that is currently selling for $82 per share and pays a perpetual dividend of $5. Donaldson Corp....

36

Donaldson Corp. has preferred stock outstanding that is currently selling for $82 per share and pays a perpetual dividend of $5. Donaldson Corp. has a marginal tax rate of 40%. What is the firm's cost of preferred stock?

Select one:

a. 3.7%

b. 5.0%

c. 6.1%

d. 7.2%