$10-8$: 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.

$