General Bill's will issue preferred stock to finance a new artillery line. The firms existing preferred stock pays a dividend of $4.00 per share and is selling for $40.00 per share. Investment bankers have advised General Bill that Flotation Costs on the new preferred issue would be 5% of the selling price. The General's marginal tax rate is 30%. What is the relevant cost of new preferred stock? A- 15.00%, B- 7.37%, C- 10.00%, D- 10.53%, E- 7.00%