Cost of Preferred Stock. In its capital structure, ABC Corporation has preferred stock paying a dividend of $5 per share and selling for $23. The company’s tax rate is 40 percent. Calculate (a) the...

Cost of Preferred Stock. In its capital structure, ABC Corporation has preferred stock paying a dividend of $5 per share and selling for $23. The company’s tax rate is 40 percent. Calculate (a) the before-tax cost preferred stock, and (b) the after-tax cost of preferred stock.