IBM is considering raising new capital through selling new preferred stock. This new preferred stock would have a par value of $100 and pay an annual dividend yield of 8%. What would the cost of IBMs preferred stock if they would net $96 per share after flotation costs?

Group of answer choices

a) 8.0%

b) 7.5%

c) 7.7%

d) 8.5%

e) 8.3%