QUESTION $9$

Which of the following statements regarding a firm's pre$-$tax cost of debt is accurate?

A$.$ It is based on the yield to maturity of the company's outstanding bonds.

B$.$ It is equivalent to the average real rate of return on all of a company's outstanding bonds, after discounting the effects of inflation.

C$.$ It is equal to the coupon rate on the latest bonds issued by the company.

D$.$ It must be estimated using the return on similar preferred stock observed in the market.

E$.$ It could be based on the stock required return under the Constant Growth Model and$/$or on the expected return on the stock according to CAPM.