Klieman Company's perpetual preferred stock sells for $$97$ per share and pays a $$9\mathrm{.}2$ annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost of $4\mathrm{.}2\%$ of the price paid by investors. What is the company's cost of preferred stock?

$9\mathrm{.}40\%$

$10\mathrm{.}40\%$

$9\mathrm{.}90\%$

$11\mathrm{.}40\%$

$10\mathrm{.}90\%$