To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 10.50% annual coupon, paid semiannually, sells at a price of $675, and has a par value of $1,000. If the firm's tax rate is 25%, what is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations.

a. 5.83%

b. 11.95%

c. 13.12%

d. 7.97%

e. 15.93%