Problem Three Use the following data to answer Questions 19 through 21: Faye Harlan, CFA, is estimating the cost of common equity for Cyrene Corporation. She prepares the following data for Cyrene: Price per share = $50. Expected dividend per share = $3. Expected retention ratio (RR) = 30%. Expected return on equity = 20%. Beta = 0.89. Yield to maturity on outstanding debt = 10%. The expected market rate of return is 12% and the risk- free rate is 3%. The dividend is expected to grow at some constant rate g, where g = ROE*RR. The firm's target capital structure consists of 40% debt and 60% equity. The firm's marginal tax rate is 40%. 19. Based on these data, Harlan determines the Cyrene's cost of common equity is 14%. Harlan most likely arrived at this estimate by using the: * O A. Dividend discounted model approach. B. Capital asset pricing model approach. C. Bond yield plus risk premium approach. D. A and B. O E. None of the above 21. The company's weighted average cost of capital (using the equity from CAPM) is closest to: O A. 9.6% B. 10.8% O C. 9.0% O D. 10.0% O E. None of the above