Diggin Tools just issued new preferred stock, which sold for $85 in the stock markets. Holders of the stock will receive an annual dividend equal to $9.35. The flotation costs associated with the new issue were 10 percent and Diggin's marginal tax rate is 30 percent. What is Diggin's cost of preferred stock, r_ps?

	a.	12.22%
	b.	11.0%
	c.	11.28%
	d.	10.3%
	e.	7.7%