2. An overview of a firm's cost of debt The before-tax cost of debt is the interest rate that a firm pays on any new debt financing. Green Caterpillar Garden Supplies (GCGS) can borrow funds at an interest rate of 9.70% for a period of six years. Its marginal federal-plus-state tax rate is 45%. GCGS's after-tax cost of debt is (rounded to two decimal places). a) 9.70% b) 4.54% c) 5.34% d) 5.07% At the present time, Green Caterpillar Garden Supplies (GCGS) has a series of fifteen-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,329.55 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If GCGS wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 05.14% 3.58% O 4.47% 04.02%