)B5. (Cost of borrowing alternatives) Exxon Mobil has a 34% taxrate and has decided to issue $100 million of seven-year debt. It has three alternatives. A U.S.public offering would require an 8% coupon with interest payable semiannually and$900,000 of flotation expense. A U.S. private placement would require an 8-3/8% couponwith interest payable semiannually and $500,000 of flotation expense. A Eurobond offeringwould require an 8-1/8% coupon with interest payable annually and $1,100,000 offlotation expense. a. Calculate the after-tax cost of borrowing for eachalternative. b. Which alternative has the lowest cost of borrowing?