Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, and its par value is $100. a. What is the stock's value? Round your answer to two decimal places. $ b. Suppose interest rates rise and pull the preferred stock's yield up to 13%. What would be its new market value? Round your answer to two decimal places. $
Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, and its par value is $100. a. What is the stock's value? Round your answer to two decimal places. $ b. Suppose interest rates rise and pull the preferred stock's yield up to 13%. What would be its new market value? Round your answer to two decimal places. $
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 14P
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![10-8: Preferred Stock
Preferred stock valuation
Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, and its par value is $100.
a. What is the stock's value? Round your answer to two decimal places.
$
b. Suppose interest rates rise and pull the preferred stock's yield up to 13%. What would be its new market value? Round your answer to two decimal places.
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40808d49-7cb9-4fde-a21f-d1f67ec6c701%2Ffc05f056-0aab-42e9-9099-a613392a516c%2Fkkxy4nh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10-8: Preferred Stock
Preferred stock valuation
Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, and its par value is $100.
a. What is the stock's value? Round your answer to two decimal places.
$
b. Suppose interest rates rise and pull the preferred stock's yield up to 13%. What would be its new market value? Round your answer to two decimal places.
$
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