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 9.25% annual coupon, paid semiannually, sells at a price of $875, 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.

Group of answer choices

a) 6.60%

b) 8.09%

c) 6.47%

d) 7.30%

e) 7.77%