The cost of preferred stock is computed the same as the:

a. Pretax cost of debt.

b. Rate of return on an annuity.

c. Aftertax cost of debt.

d. Rate of return on a perpetuity.

e. Cost of an irregular growth common stock.

d. Rate of return on a perpetuity.

Explanation:

The formula to compute the cost of preferred stock is shown below:

Cost of preferred stock = Annual dividend : Price of preferred stock per share

And,

The value of preferred stock = Annual dividend : Discount rate

Since in the case of preferred stock it provided the fixed amount of annual dividend and on the other hand, the perpetuity defines the equal amount of continued cash flows so it matches the characteristics with each other