To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 10 years to maturity. This bond has a 9.25% annual coupon, paid annually, sells at a price of $1,075, and has a par value of $1,000. If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calculation? (Hint: calculate the YTM, which is the before-tax cost of debt; then due to the tax-deductible for a debt, cost of debt must be after-tax cost of debt).

a. 4.878%

b. 4.126%

c. 4.952%

d. 4.526%

e. 4.231%