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Morigas Inc. is a publicly traded firm that expects to earn $25 million in operating income and pay a marginal tax rate of 40%. The firm has $250 million in debt, at a 5% interest rate, and is planning to double its debt. If the expected interest rate on the debt will rise to 8.5% on all debt after the debt doubling, what will the after-tax cost of debt for the firm be after the borrowing? Hint: your operating income will be lower than the interest expense, which means your tax benefit will be capped by operating income. Given that, estimate the new, adjusted tax rate and use in after-tax cost of debt calculation. O a. 5.5% O b. 7.5% O c. 4.5% O d. 6.5%