Weaver Chocolate Co. expects to pay dividend of $2.275, its expected constant dividend growth rate is 6.0%, and it's common stock currently sells for $40.00 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?

Do not round your intermediate calculations.

a. 11.99%

b. 12.47%

c. 11.63%

d. 13.19%

e. 9.35%