Explanation

The most appropriate estimate of the cost of debt is Option A: YTM of the straight debt in US dollars.

Reasoning:

• The company already has publicly-traded straight debt denominated in US dollars with a credit rating of A
• The yield-to-maturity (YTM) of the company's own outstanding debt provides the most direct and accurate measure of its current cost of debt
• This reflects the market's current assessment of the company's credit risk in the currency being analyzed (US dollars)
• Using peer bonds (Option B) introduces estimation error since peers may have different credit characteristics
• Option C is inappropriate because it involves currency conversion adjustments and country risk adjustments that are not necessary when the company already has US dollar-denominated debt

Key Concept: When a company has publicly-traded debt, the YTM of that debt is typically the best estimate of its current cost of debt.