A is a food processing company that generated $80m in operating income last year. It has $300m in bank loans with an average book interest rate of $15m. The company is not rated but you can use the table in the notes to compute a bond rating. If the risk-free rate is 3% and A has 100m shares outstanding at $15 per share, what is the pre- tax cost of debt? a) 4.00% b) 4.30% c) 5.00% d) 6.30% e) None of the above.