Estimate of telecommunications services

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A. What is your estimate of Telecommunications Services' cost of debt?

B. Should flotation costs be included in the component cost of debt calculation? Explain.

C. Should the nominal cost of debt or the effective annual rate be used? Explain.

D. How valid is an estimate of the cost of debt based on 15-year bonds if the firm normally issues 30-year long-term debt?

E. Suppose Telecommunications Services' outstanding debt had not been recently traded; what other methods could be used to estimate the cost of debt?

F. Would it matter if the currently outstanding bonds were callable? Explain.

Reference no: EM133062605

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