LePage Co. expects to earn $2.20 per share during the current year, its expected payout ratio is 60%, its expected constant dividend growth rate is 4.0%, and its common stock currently sells for $24.00 per share. New stock can be sold to the public at the current price, but a flotation cost of 3.5% would be incurred. What would be the cost of equity from new common stock?

	A.	10.25%
	B.	9.70%
	C.	9.50%
	D.	9.00%

Explain step-by-step.