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QUESTION 3 When estimating the cost of debt that is rated below investment-grade, the appropriate forecast cash flows to use are: a. Contractual or promised

QUESTION 3

  1. When estimating the cost of debt that is rated below investment-grade, the appropriate forecast cash flows to use are:

    a.

    Contractual or promised cash flows
    b.

    Expected cash flows as adjusted for the risk of default
    c.

    Cash flows derived from the coupon rate
    d.

    Free cash flow to the firm
    e.

    None of the above

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