Dandy Co. had $1,000,000 of assets, financed entirely by common shares ($600,000) and retained earnings ($400,000). The operating profit for the year was $250,000, and tax was paid on the profits at the rate of 40%. The company borrowed $250,000 at an interest rate of 5%, using the cash borrowed to pay a dividend to common shareholder. The after-tax cost of debt interest was Select one: O a. 3.0% O b. 5.0% O c. 2.5% O d. 4.0%