Weaver Chocolate Co. expects to earn $3.00 per share during the current year, its expected dividend payout ratio is 70%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $37.50 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? Do not round your intermediate calculations.

a. 12.25%

b. 14.42%

c. 11.33%

d. 11.60%

e. 11.89%