The pre-tax cost of debt for the firm is the current annual
economic cost of borrowing for the firm (before any tax
effects).
That cost is better measured by the current yield to
maturity on the firm’s debt than by the coupon rate that
is currently paid on that debt. Since most firms try to issue new
bonds very close to par, the coupon rate on a bond is an indication
of the yield to maturity on the bond issue at the time of
issue.
Unless the market-determined borrowing rate for the firm is the
same as when the bond was issued, then the current yield to
maturity of a bond will not be equal to the current coupon rate on
the bond.
So, because of the above reasons,it is not appropriate to use
the coupon rate on a firm's bonds.