A company's $100 par value preferred stock with a dividend rate of 9.5% per year is currently priced at $103.26 per share. The company's earnings are expected to grow at an annual rate of 5% for the foreseeable future. The cost of the company's preferred stock is closest to:
rp = Dp /Pp (or Dividend/Price) = ($100 x 0.095)/$103.26 = 9.2%.