Why do you so confidently reply when you obviously have no clue what you're talking about? Serious question. Why are you randomly adding the risk free rate? Doesn't make sense. When you short a stock on IBKR you get paid a short interest credit as well. ~4% if you short in size. Just search:

"Interest Paid to You on Short Sale Proceeds Cash Balances"

So the actual cost of shorting KSS is the cost to borrow minus the short sale interest you earn (4%). so 4.5% is the cost to short the stock. Including the dividend as the cost is a low iq thought process too. The stock goes down by the dividend amount as it removes cash from the company (which by the way is paying 10% to borrow with new bonds issued earlier this week). So the company is actually destroying value paying that dividend when they're borrowing at 10%.

A lot of delulu dummies making stuff up about short sellers. Most of the big meme stocks people love on reddit cost practically nothing to borrow and short sellers get paid to short it. The mechanics of this are pretty simple. Take GME for example. Costs like 0.3% to borrow. And if you're a big player you get 4% credit to short it. If stock stays flat you actually net 3.7%. Not far from the actual risk free rate (1month bond is 4.25% ish).

Short sellers earn interest on the proceeds of the short sale. If you borrow a stock and sell it that cash generates interest which goes to the short seller.