• Long-term corporate debt: The 20-year Treasury rate is 4.67 percent, and a firm's credit rating is BB. Suppose management of the firm decides to raise $20 million by selling 20-year bonds. Management determines that since it has plenty of experience, it will not need to hire an investment banker. At present, 20-year BB bonds are selling for 185 basis points above the 20-year Treasury rate, and it is forecast that interest rates will not stay this low for long. What is the cost of borrowing? What role does timing play in this situation?