English version Ross Corporate Finance Exercise Answers Chap012CHAPTER 12 RISK AND THE COST OF CAPITAL Answers to Concepts Review and Critical Thinking Questions 1It is the minimum rate of return the

f its aftertax cost of debt. However, if the company does not have any outstanding debt or if the current market conditions have changed significantly since the last time the company issued debt, it may need to estimate its aftertax cost of debt by analyzing the current market conditions and the creditworthiness of the company. This estimate may be based on the current yield on comparable bonds issued by other companies with similar credit ratings or on the cost of bank loans or other sources of financing