Bosio Inc'S Perpetual Preferred Stock Sells for $85

Bosio Inc.'s perpetual preferred stock sells for $85.00 per share,and it pays an $8.50 annual dividend.If the company were to sell a new preferred issue,it would incur a flotation cost of 4.00% of the price paid by investors.What is the company's cost of preferred stock for use in calculating the WACC?

A) 8.75%
B) 12.81%
C) 11.35%
D) 8.44%
E) 10.42%