Klieman Company's perpetual preferred stock sells for $87 per share and pays a $10.7 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost of 3% of the price paid by investors. What is the company's cost of preferred stock? \begin{tabular}{l} 11.68% \\ 14.68% \\ 10.68% \\ 12.68% \\ 13.68% \\ \hline \end{tabular}