Which of the following statements regarding a firms pretax cost of debt is accurate?

Multiple Choice

• It is based on the current yield to maturity of the company's outstanding bonds.

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

• It must be estimated as it cannot be directly observed in the market.

• It is equivalent to the average current yield on all of a company's outstanding bonds.

• It is based on the original yield to maturity on the latest bonds issued by a company.