MCQOPTIONS
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| 1. |
Which one of the following represents the best estimate for a firm's pre-tax cost of debt? |
| A. | the current yield-to-maturity on the firm's existing debt |
| B. | the firm's historical cost of capital |
| C. | twice the rate of return currently offered on risk-free securities |
| D. | the current coupon on the firm's existing debt |
| Answer» B. the firm's historical cost of capital | |