Ivey Industries plans to issue a $100 par perpetual preferred stock with a fixed annual dividend of 8 percent of par. It would sell for $96.80, but flotation costs would be 5 percent of the market price, making the net price $91.96 per share. What is the percentage cost of preferred stock after taking flotation costs into account?

a.

7.85%

b.

9.53%

c.

8.70%

d.

8.00%

e.

8.26%