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Barnes Air Conditioning Inc. has two classes of preferred stock: floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value
Barnes Air Conditioning Inc. has two classes of preferred stock: floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value of $100. The floating rate preferred stock pays an annual dividend yield of 9 percent, and the straight preferred stock pays 10 percent. Since the issuance of the two securities, interest rates have gone up by 2.00 percent for each issue. Both securities will pay their year-end dividend today. a. What is the price of the floating rate preferred stock most likely to be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Price b. What is the price of the straight preferred stock likely to be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Price
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