3. Next, we need to calculate MMM's cost of debt. Unfortunately, Thomson ONE doesn't provide a direct measure of the cost of debt. However, we can use different approaches to estimate it. One approach is to take the company's long-term interest expense and divide it by the amount of long- term debt. This approach only works if the historical cost of debt equals the yield to maturity in today's market (that is, if MMM's outstanding bonds are trading at close to par). This approach may produce misleading esti stimates in years in which MMM issues a significant amount of new debt. For example, if a company issues a great deal of debt at the end of the year, the full amount of debt will appear on the year-end balance sheet, yet we still may not see a sharp increase in interest expense on the annual income statement because the debt was outstanding for only a small portion of the entire year. When this situation occurs, the estimated cost of debt will likely understate the true cost of debt. Another approach is to try to find this number in the notes to the