Appendix B^^

Appendix D^^

Problem 14-03 What should be the prices of the following preferred stocks if comparable securities yield 2 percent? Use Appendix B and Appendix D to answer the questions. Round your answers to the nearest cent. MN, Inc., $10 preferred ($150 par) $ CH, Inc., $10 preferred ($150 par) with mandatory retirement after 5 years S What should be the prices of the following preferred stocks if comparable securities yield 6 percent? Round your answers to the nearest cent. MN, Inc., $10 preferred ($150 par) $ CH, Inc., $10 preferred ($150 par) with mandatory retirement after 5 years $ Interest Factors for the Present Value of One Dollar 1% 2% 9% 12% 24% Time Period (e.g. year) 1 2 3 4 5 .990 980 971 961 .951 3% 4% 980 971 962 .961 .943 925 1942 915 .889 .924 .889 855 .906 863 822 5% 952 907 .864 .823 .784 6% .943 .890 .840 .792 .747 7% .935 .873 .816 .763 .713 8% .926 .857 .794 .735 .681 917 .842 .772 .708 .650 10% 14% .909 .893 .877 .826 .797 .769 .751 .712 .675 .683 .636 592 .621 567 519 15% .870 .756 .658 .572 497 16% 18% .862 .847 .743 .718 .641 .609 .552 .516 .476 437 20% .833 .694 579 482 402 .806 .650 .524 423 .341 28% .781 .610 -477 .373 .291 6 7 8 942 933 923 914 .905 .888 .871 .853 .837 .820 .838 790 .746 .705.666 630 596 564 .813 760 .711 .665.623 583 .547 .513 .789 .731 .677.627 582 540 -502 .467 .766 .703 .645 592 .544 500 460 424 .744 676 614 558 508 463 422 .386 .507 .452 404 .361 .322 456 432 400 .376 351 .327 .308 .284 .270 .247 410 370 .354 .314 .305 .266 .263 .226 .227 .191 .335 .275 .279 222 .233.179 .194 .144 .162 .116 .227 .178 .139 .108 .085 10 11 12 13 14 15 .896 .887 .879 .870 .861 .804 .788 .773 .758 .743 .722 .701 .681 .661 .642 .650 585.527 .625 .557 .497 .601 .530 469 .577 .505 442 .555 481 .417 475 444 415 388 .362 429 .397 .368 340 .315 388 .356 1326 .299 .275 .350 319 .290 .263 .239 .287 .257 .229 .205 .183 .237 .208 -182 .160 .140 .215 .187 .163 .141 .123 .195 .168 .145 .125 .108 .162 .137 .116 .099 .084 .135 .112 .093 .078 .065 .094 .076 .061 .049 .040 .066 .052 .040 .032 .025 16 17 18 19 20 .853 .844 .836 .828 .820 .728 .714 .700 .686 .673 .623 534 .605 513 .587 494 .570 475 .554 456 458 436 416 396 377 .394 .371 .350 .331 .312 339 .317 .296 .276 .258 .292 .270 .250 .232 .215 .252 .231 .212 .194 .178 .218 .198 .180 .164 .149 .163 ..123 .107 .093 .071 .054 .032 .019 .146.108 093 .080 .060 .045 .026.015 .130 .095 .081 069 .051 .038 021012 .116 .083.070 ,060 .043 .031 .017 .009 .104 .073.061 .051 .037 .026 .014 .007 25 .780 .610 478 375 .295 .233 .184 .146 .116 .092 .059 .038 .030 .024 .016 .010 1.005 .002 30 .742 .552 412 308 .231 .174 .131 .099 .075 .057 .033 .020 .015 .012 .007 .004 002 .001 Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g. year) 1 2 3 4 5 1% 2% 3% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 7 8 9 10 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778