Ocean Inc. expects to earn $$3\mathrm{.}00$ per share during the current year, its expected payout ratio is $40\%,$ its expected constant dividend growth rate is $3\mathrm{.}50\%,$ and its common stock currently sells for $$31\mathrm{.}00$ per share. New stock can be sold to the public at the current price, but a flotation cost of $5\%$ would be incurred. What would be the cost of equity from new common stock?

a$)7\mathrm{.}57\%$

b$)8\mathrm{.}18\%$

c$)7\mathrm{.}37\%$

d$)8\mathrm{.}50\%$