Banco. has preferred shares issued and outstanding. The preferred shares have a

dividend rate of 8 percent and a par value of $75.00 and no maturity date.

a.

If market interest rates for preferred shares are 7 percent, what will

these preferred shares be selling for in the market today?

(3 marks)

b.

If these preferred shares matured in 5 years and the market rate of

interest was 7 percent, what would the companys preferred shares be

selling for in the market today?