Coral Inc's Preferred Stock Currently Sells for $90 a Share and and Pays

Multiple Choice

Coral Inc.'s preferred stock currently sells for $90 a share and pays a dividend of $10 per share; however, the firm will net only $80 per share from the sale of new preferred stock. What is the firm's cost of newly issued preferred stock? (Round off the answer to two decimal places.)

A) 11.15 percent
B) 12.50 percent
C) 16.45 percent
D) 10.52 percent
E) 13.46 percent