1. Joe's Coffee Ltd. needs to raise money to open a second location and is considering two options: Option A is to borrow $100,000 from a local bank, at an interest rate of 5% per year. Option B is to issue 1000 shares of $4 preferred stock for $100 each. Assuming that the company's tax rate is 25%, calculate the annual after-tax cost (in dollars) of each option. Select one: a. 1. Option A costs $5,000 and Option B costs $4,000 b. 1. Option A costs $5,000 and Option B costs $3,000 c. 1. Option A costs $3,750 and Option B costs $4,000 d. 1. Option A costs $3,750 and Option B costs $3,200