Consider the following information about the preferred stock from Scottie's Dog Treats:

Current price = $97.50 per share

Annual dividend = $8.50.

If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

Group of answer choices

8.72%

9.44%

9.08%

10.22%

9.82%