All of the Following Methods Can Be Used to Estimate

Multiple Choice

All of the following methods can be used to estimate the cost of debt except:

A) If the firm targets an "A" rating (or any other bond rating) ,a review of the yields to maturity on A-rated bonds in the business section of the local newspaper can provide an estimate of the firm's current borrowing costs.
B) The firm can solicit the advice of personal financial planners on the cost of issuing new debt.
C) If the firm has debt currently trading,it can send a survey to current owners of its bonds to find out what rate the firm should offer.
D) A firm can seek long-term debt financing from a wealthy individual;preliminary discussions with the individual will indicate a ballpark interest rate the firm can expect to pay on its borrowing.
E) None of the above statements are correct.