A Company Paid Total Interest on Its Debt Last Year

A company paid total interest on its debt last year of $400,000 and also paid out $250,000 in dividends.If their tax rate is 40%, what was the after-tax cost to the company of each of those sources of financing? $\begin{array}{lll}&\text { Interest } & \text { Dividends }\\a) &\$ 400,000 & \$ 250,000 \\b) &\$ 400,000 & \$ 150,000 \\c) &\$ 240,000 & \$ 250,000 \\d) &\$ 240,000 & \$ 150,000\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D