[Preferred Stock Characteristics] A share of a ventures preferred stock is convertible into 1.5 shares of its common stock. The dividend on the preferred stock is $0.50 per share.

A. If the firms common stock is currently trading at $9.75, what is the conversion value of a share of the preferred stock?

B. What would be the dividend yield on the preferred stock based on its conversion value?

C. What explanation would you give if the ventures preferred stock currently trades at $15? What would be the dividend yield?

D. If the venture doubles the number of shares of its common stock that are outstanding (and cuts its stock price in half) but increases the conversion terms on its preferred stock to 2.5 shares