10-8: Preferred Stock Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 6%, 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 11%. What would be its new market value? Round your answer to two decimal places. $ 10-5: Constant Growth Stocks Constant growth valuation Thomas Brothers is expected to pay a $2.7 per share dividend at the end of the year (that is, D1=$2.7 ). The dividend is expected to grow at a constant rate of 8% a year. The required rate of return on the stock, rs, is 10%. What is the stock's current value per share? Round your answer to two decimal places. $ 10-5: Constant Growth Stocks Valuation of a constant growth stock A stock is expected to pay a dividend of $2.75 the end of the year (that is, D1=$2.75 ), and it should continue to grow at a constant rate of 5% a year. If its required return is 15%, what is the stock's expected price 4 years from today? Round your answer to two decimal places. $ 10-5: Constant Growth Stocks Valuation of a declining growth stock Martell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 10% per year. If D0=$2 and rs= 10%, what is the value of Martell Mining's stock? Round your answer to two decimal places. $ 10-8: Preferred Stock Preferred stock valuation Fee Founders has perpetual preferred stock outstanding that sells for $32.00 a share and pays a dividend of $4.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %