Hi there,

I need your help. Dont understand how this does work. Can you help and explain to me on this?

Much appreciated with your help,

Michelle

Here questions:

2. What should be the prices of the following preferred stocks if comparable securities yield 7 percent? Why are the valuations different?

A. MN, Inc., $8 preferred ($100 par)

B. CH, Inc., $8 preferred ($100 par) with mandatory retirement after 20 years.

3. Repeat the previous problem but assume that comparable yields are 10 percent. In which case did the price of the stock change? In which case was the price more volatile?