Porsche stock sells for $50 per share, its first-year dividend will be $3.00, its growth rate is a constant 5 percent, and the company will incur a flotation cost of 15 percent if it sells new common stock. What is the firms cost of new equity?

a. 9.20%

b. 9.94%

c. 12.05%

d. 11.75%

e. 12.40%