Builtrites common stock is currently selling for $58 a share and the firm just paid an annual dividend of $2.40 per share. Management believes that dividends and earnings should grow at 7% annually. Since new stock would need to be sold to finance an expansion, Builtrite expects flotation costs to be 5% of the expected selling price of $58 a share. Based on this, and a marginal tax rate of 34%, what is the cost of new common stock?

A) 11.4%

B) 7.49%

C) 7.70%

D) 11.7%