19. Of the following provisions or protective covenants that might be found in a bond indenture, which would tend to increase the coupon interest rate on the bond in question? 01) Limit future borrowing O2) Call provision O3) Sinking fund provision 04) Convertible feature

20. Common stock in Akron Corporation has a beta of 1.62. The market risk premium is 8.2% while T-bills are currently yielding 2.9%. Akron's last paid annual dividend was $1.87 per share and dividends are expected to grow at a constant rate indefinitely. Akron's dividend payout ratio is 60% and its ROE is 18%. The stock sells for $25 a share in the market. What is the estimated cost of equity using the average return of the Capital Asset Pricing Model and the Dividend Discount Model?

01) 15.70% 02) 14.06% O3) 13.87% 04) 14.23%