10-8 Preferred Stock Problem 10-8 Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 8%, 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 15%. What would be its new market value? Round your answer to two decimal places. Problem 10-14 Nonconstant growth Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly at a rate of 32% per year during Years 4 and 5; but after Year 5 growth should be a constant 996 per year. If the required return on Microtech is 15%, what is the value of the stock today? Round your answer to the nearest cent