33. A debenture is A. a lengthy legal document stating the conditions under which a bond has been issued a secured bond that is secured by unspecified assets. a bond secured by specific asset an unsecured bond that only creditworthy firms can issue. B. C. D. 34. The cost of preferred stock may be estimated by using the A. B. C. D. E. yield curve. net present value method. zero growth model Variable growth model None of the above The cost of retained earnings is A. zero since the company does not have to raise money by issuing shares B. is usually less than cost of a new issue of common stock C. greater than the cost of common stock equity D. irrelevant to the investment/financing decision. 35. 36. A firm has a beta of 0.8. The estimated cost of common stock equity is 15.6 percent and the risk-free rate of return equals 6 percent. The return on the market portfolio equals A. 6 percent B. 12percent. C. 18 percent. D. 15.6 percent. E. None of the above A firm has common stock with a market price of S55 per share and just paid a dividend of $2.62 per share. The dividends paid on the outstanding stock over the past five years are as follows: 37. Dividend Year $ 2.00 2.14 2.29 2.45 2.62 The cost of the firm's common stock equity is A. 4.1 percent. B. 5.1 percent. C. 12.8 percent. D. 12.1 percent. E. None of the above