1.) What is the proper estimate for the cost of preferred stock in estimating a company's WACC?

	a.	The estimated cost of newly issued preferred stock
	b.	The dividend yield on existing preferred stock's par value.
	c.	The historical return on the company's preferred stock.
	d.	None of the above.

2.) The CAPM/SML and Discounted Cash Flow approaches to estimating the cost of retained earnings will be the same under which of the following conditions?

	a.	The company's common stock price is in equilibrium.
	b.	The company's preferred stock price is in equilibrium.
	c.	The company's common stock is undervalued.
	d.	None of the above.