A Company's Pretax Cost of Debt

Multiple Choice

A company's pretax cost of debt:

A) is based on the current yield to maturity of the company's outstanding bonds.
B) is equal to the coupon rate on the latest bonds issued by the company.
C) is equivalent to the average current yield on all of a company's outstanding bonds.
D) is based on the original yield to maturity on the latest bonds issued by a company.
E) has to be estimated as it cannot be directly observed in the market.