You are working for a​ mid-sized company that is looking to estimate its cost of debt. The company has never had an issuance in the bond market. What would be the best proxy to estimate its cost of​ debt?   A. Cost of its bank debt   B. Cost of its equity   C. Cost of debt from companies of a similar market capitalization   D. Cost of debt in the corporate bond market

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You are working for a​ mid-sized company that is looking to estimate its cost of debt. The company has never had an issuance in the bond market. What would be the best proxy to estimate its cost of​ debt?

 
A. Cost of its bank debt
 
B. Cost of its equity
 
C. Cost of debt from companies of a similar market capitalization
 
D. Cost of debt in the corporate bond market
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