Sweet Treats common stock is currently priced at $36.72 a share. The company just paid $2.18 per share as its annual dividend. The dividends have been increasing by 2.2% annually and expected to continue doing the same. The company has decided to float new issue of stock and the flotation cost is 10%. Calculate the cost of equity is it issues new stock?

A) 8.94%

B) 9.84%

C) 4.2%

D) 12.2%

E) 14.2%