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Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 7%, and its par value is $100.

Preferred stock valuation

Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 7%, and its par value is $100.

a What is the stock's value? Round your answer to two decimal places.

b Suppose interest rates rise and pull the preferred stock's yield up to 14%. What would be its new market value? Round your answer to two decimal places.

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