The pretax cost of debt:
a. Is based on the current yield to maturity of the firm's outstanding bonds.
b. Is equal to the coupon rate on the latest bonds issued by a firm.
c. Is equivalent to the average current yield on all of a firm's outstanding bonds.
d. Is based on the original yield to maturity on the latest bonds issued by a firm.
e. Has to be estimated as it cannot be directly observed in the market.